Non-Profits

How it works

Eligible projects have the following characteristics:

  • An eligible issuer of funds is required. This can be a local government or port authority, such as the Finance Authority
  • 95 percent of the bond proceeds need to be expended on facilities used by the 501(c)(3)
  • The facilities must be capital investments including buildings, building improvements or new equipment
  • Refinancing of eligible facilities is an allowed purpose under certain circumstances

Market Access

The bonds are typically sold, with the proceeds used to fund the transaction, in several different ways:

  • Institutional investors: The bonds are credit enhanced and sold in the market. This could take the form of a Letter of Credit. Another option is to use a credit enhanced fund, like the Finance Authority’s Bond Fund, to sell the bonds in the marketplace, taking advantage of the series of reserves in place (including $10 million in cash and Letter of Credit) to allow for more competitive rates for the borrower
  • Privately held: The bonds are placed with the borrower’s lending institution. This can happen when the bank is willing to hold that bond as an investment in its portfolio. Before doing this, most banks will make sure they have a thorough understanding of the customer and the proposed transaction