The Dormitory Authority of the State of New York last week revised a previously approved financing because staff expected that credit rating recalibrations obviated the need for mortgage insurance.
In January, DASNY approved a $40.1 million pooled financing on behalf of members of the InterAgency Council, a organization of nonprofit agencies serving the mentally and developmentally disabled. The bonds were to be sold in three series but will now be marketed as two.
Most of the projects were secured by funds from the New York State Office of Mental Retardation and Developmental Disabilities. One series was to fund projects that had mortgage insurance from the State of New York Mortgage Agency. Another series had carried an intercept of state aid as an added layer of security.
DASNY staff expected the recalibration by Moody’s Investors Service of its municipal ratings scale to a global scale would narrow the spread between SONYMA insured bonds and those with the intercept. The issuer decided it was more cost-effective to issue the two series as a single one with the intercept but without insurance. A smaller series not funded by the state will be privately placed.
Municipal Capital Markets Group Inc. will lead manage the deal. Hawkins Delafield & Wood LLP is bond counsel.
DASNY’s board also gave final approval to $91 million of tax-exempt bonds for two hospital projects.
Memorial Sloan-Kettering Cancer Center in New York City plans to use $80 million of tax-exempt bond proceeds to buy the former Cabrini Medical Center in Manhattan for future development. The bonds will have maturities up to 30 years and will initially be privately placed with JPMorgan for a four year term. Nixon Peabody LLP is bond counsel.
The board also approved $11 million of tax-exempt fixed-rate bonds for Highland Hospital of Rochester for renovation and construction projects. RBC Capital Markets will underwrite the bonds that will have maturities of up to 22 years. Sidley Austin LLP is bond counsel.