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High Credit Quality Commercial Bond Program
LOAN SIZE: $10,000,000 - $150,000,000. Lower
amounts by exception. First mortgage required.
PROPERTY TYPE: Owner Occupied :
Industrial, manufacturing, mixed use, retail, office.
Investor Owned: Multi-family, mixed use, retail, office,
hotel.
Not-for-Profit: Private schools, health care, YMCA's,
JCC's, colleges.
Publicly owned: Tax supported entity; stadiums,
convention centers
Tax Increment Financing (TIF): Available for
infrastructure of development projects.
Note: for large development projects this financing typically is
financed separately from the construction financing.
CREDIT: Quality of transaction must be able to
attract a Direct Pay Letter of Credit (LOC) from a commercial
bank or financial institution rated “A” or higher.
Note : a lesser rated bank can be wrapped by FHLB or other rated
institutions.
INTEREST RATES: Interest rates are variable and
reset weekly (or fixed in the case of
non-profits and public entities). APR on variable rates consist
of 1) The “Base Rate” (Normally within 5 Bps of 30-day Libor),
2) The annual LOC fee, and 3) The annual Remarketing Fee.
Typical Loan at 1/30/06: Base Rate: 4.45%, LOC: 1.00% and RF:
.15%. total APR: 5.60%.
TERMS: Bonds have 25-30 year term,
self-liquidating. Normally non-recourse to owners. Minimum DSCR
1.25X. Up to 80% LTV on Multi-family and 75% LTV on Commercial
properties. Bonds are fully pre-payable at any time without
penalty on variable rate issues and contain some call protection
on fixed rate issues.
FEES: Underwriting Fee as % of bond issue
typically as follows: <$5m (2.5%); $5m-$10m (2.0%); $20m-$50m
(1.5%); >$50m (TBD).
BORROWER COSTS: Borrower will be required to
post an application deposit with lender to cover costs
associated with initial site inspection(s), deal write–up and
deal presentation for investor. Borrower will also pay all fees
of the underwriter and the LOC Bank, including legal, appraisal,
trustee, Etc.
TIME FRAME: Time frame from application to
funding is typically 60–90 days.
SPECIAL CONDITIONS : LOC providers must
maintain “A” or better rating. If LOC provider's rating drops,
the LOC will be replaced.
Note : Bonds contain provisions to convert to
fixed rate via a remarketing. |
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