Higher Education
Depth of experience. We have been engaged in higher education financing for many years, serving as bond counsel and/or underwriter’s counsel for student housing (
for privatized student housing see "HOUSING – Student Housing") and academic and athletic facility financings for both public and private institutions in several states. We have worked on both new money and refunding financings, and during these engagements we have assisted colleges and universities by providing additional experience to assist with methods to maximize their investment of bond proceeds through the structuring of debt service reserve fund requirements, guaranteed investment agreement/contracts and forward purchase agreements.
Familiarity with varied funding structures. We are familiar with a variety of state systems for governing and funding universities. For example, in Kentucky, we have served the State Universities in our capasystems in other states. In addition, we serve as bond counsel to all public state universities in Kentucky and for several state universities in Ohio. In Ohio, we work with institutions of higher education to provide financing for such improvements as student housing and "auxiliary facilities," which include student service facilities, bookstores, athletic and recreational facilities and auditoriums, to name a few. In addition, we have experience in working with the State of Ohio, specifically the Treasurer of State, in connection with the issuance of higher education capital facilities bonds for the State of Ohio.
Familiarity with varied financing structures. We have participated in various financing structures for higher education projects such as fixed rate, non-credit enhanced issues, fixed rate insured issues, variable rate demand bonds supported by bank letters of credit, variable rate demand bonds supported by bond insurance and a bank liquidity instrument, and certificates of participation, to name a few. Several of the variable rate issues involved the purchase of swap instruments to create a fixed rate (
see "SWAPs AND OTHER DERIVATIVE PRODUCTS"). We have helped to develop approaches to the housing and dining needs of various universities that are outside the traditional housing and dining structure. We have also developed a pool loan program for the independent colleges in Kentucky.
Creative debt structuring. Our Tax Department is dedicated to addressing the wide range of tax issues that may arise in any given transaction and highly skilled in structuring debt to minimize borrowing costs. For example, as a result of creative debt structuring for a university stadium issue based on our recommendations, only $1.5 million of $10 million in expansion costs associated with private activity was issued on a taxable basis. Our Tax Department is also adept at identifying refunding escrow restructuring opportunities, which, depending on market fluctuations for U.S. Treasury Obligations, could involve a benefit to a university totaling several hundred thousand dollars (
see "TAX AND FINANCIAL ANALYSIS – Investment Products").
Consultation regarding legislative matters. We provide extensive consultation and analysis with respect to legislative issues and statutory interpretation. For example, in Kentucky, we participated in matters dealing with the creation of the Kentucky Community and Technical College System ("KCTCS"), including consulting regarding the legislation and its effect on outstanding bonds and drafting an agreement. During the course of our consultation, we discussed several legal issues with the rating agencies, giving us greater insight into the issues surrounding higher education financing. We have also recommended legislation, which was eventually adopted, to provide for a state intercept mechanism to improve the ratings on State University bonds in Kentucky.
