CHICAGO - Catholic elementary and high schools are increasingly turning to the tax-exempt debt market to finance their capital projects, according to bankers at Ziegler Capital Markets, which recently closed a deal for the National Shrine of the Little Flower in Royal Oak, Mich.

"It's starting a trend for diocese schools to access the tax-exempt market instead of depleting their internal funds," said Lynn Daly, a senior vice president in Ziegler's church and school group. "We're very careful with any faith-based financing to make sure that we understand what we're financing, and that it's not exclusively a project for prayer. It takes a little bit more attention than with a university."

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