Vancouver Housing Authority (VHA), WA

Multiple Tax-Exempt Bond Financings

Description of Scope:

Financial advisory services related to the structuring, marketing, and pricing verification of bonds for affordable housing purposes.

Client:

VHA provides affordable rental housing and housing assistance for more than 12,000 residents in Clark County, Washington. They own and operate 40 properties totaling 3,545 rental units and provide many programs to assist community members with housing.

Projects Description:

In later 2008 with the financial markets in significant turmoil, the firm assisted VHA in evaluation and implementation of a $30 million refinance of three outstanding bond issues. The Fishers Mill, Willow Creek, and Cougar Creek properties were owned and operated by VHA and required rehabilitation and improvements in addition to achieving substantial interest rate reduction through refinancing.

In 2009, VHA assigned the firm to assist in arranging the financing for construction and permanent financing of a 51-unit family affordable housing project known as Camas Ridge Apartments.

Services:

For the 2008 Pooled Bond refinancing, the firm assisted VHA in evaluating and then issuing $30 million in variable rate demand bonds with 30-year credit and liquidity enhancement from Freddie Mac. The bonds were hedged for 15-years with an interest rate swap from a triple-A counterparty to achieve a sub-4% borrowing rate.

For the Camas Ridge Apartments, the assignment included testing multiple financial proformas as the development costs and timelines were finalized, conducting a competitive solicitation for direct placement of either Build America Bonds or traditional "bank-qualified" tax-exempt bonds, and supporting through the documentation and closing process. The $4.7 million "mini-perm" tax-exempt direct placement was completed with U.S. Bank in August 2010 with a low 4% fixed rate. The plan of finance included subordinated loans from the State of Washington Housing Trust Funds, and County HOME and Community Development Block Grant funds.