The Dormitory Authority of the State of New York yesterday gave final approval to up to $778 million of bonds to refund certain state-backed debt.
DASNY staff at the monthly board meeting also presented preliminary ideas for the creation of a finance committee in order to comply with new regulations governing public authorities enacted by the state last year.
The $778 million of refundings will be done in two pieces of fixed-rate debt that may be tax-exempt or taxable. The first will refund up to $525 million of state-backed debt issued by DASNY, the New York State Environmental Facilities Corp. and the New York State Thruway Authority. The DASNY bonds being refunded include state-backed debt sold to fund capital projects at the City University of New York.
The debt will be issued as consolidated service contract bonds. State law permits any issuer of state-backed debt to refund such debt previously sold by other issuers. The second piece consists of up to $253 million of bonds to refund debt issued to fund other CUNY capital projects.
Nixon Peabody LLP is bond counsel. The underwriting syndicate and date of pricing was not announced.
DASNY staff and board members also discussed how to create the new finance committee required under public authority reform legislation enacted last fall. The role of the committee for DASNY, a conduit issuer, will likely be different from that of similar bodies at other authorities that issue debt on their own credits and approved financings prior to full board approval.
“We want to make sure ... that our process is as streamlined and efficient as possible,” said executive director Paul Williams Jr. “We’re not contemplating that the finance committee would review every single deal.”
Under a draft proposal, DASNY would create a three-member finance committee that would review the agency’s debt policies. The panel could also review new borrowers that come to the authority that pose any special challenges, Williams said.
“Maybe there’s a role for the finance committee, at the request of the board, to do some groundwork on some of those credits before they’re actually brought to the board by staff for formal approval,” he said.
A final proposal for the committee’s creation will be announced at a future meeting.
DASNY also announced that it would issue a request for proposals in the near future for financial advisers and swap advisers. The agency expects to hire a panel of advisers.
It also gave final approval to two other transactions. The Samaritan Medical Center in Watertown plans to reoffer and privately place $30 million of bonds issued last year with Key Bank NA. Key Bank provided a letter of credit on the bonds but the bank was subsequently downgraded.
The Nottingham Retirement Community Inc. in Jamesville plans to refund $19 million of bonds issued in 1995.
Vassar College received preliminary approval for $50 million of bonds for construction and renovation projects.