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SummerWood Tefra Hearing

Event Date: 
08/16/2007 - 10:00am to 10:30am

SummerWood Tefra Hearing Notice

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Pooled Recycling Loan Program

CHEFA offers a pooled recycling loan program which allows the participating institutions to "recycle" bond proceeds. The bond issue is structured as a variable rate transaction, with credit enhancement provided by a letter of credit. Each loan has an amortization schedule based on the initial project while the bonds are given a longer amortization schedule (typically a bullet of 25 or 30 years). As the initial loan is amortized, payments are made into a loan repayment fund held by the trustee.

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Types of Bond Financing

Bond financing should be explored as an option by a not-for-profit institution, taking into account the timing need for project funds, the size of the anticipated borrowing, and the credit quality of the borrower. Typically, a bond issue with a par amount above $5 million would be cost effective for a bond issue, and the larger the transaction, the lower overall costs of borrowing. CHEFA staff is ready to assist you with the components and timing of a bond transaction, the associated costs, and alternative financing options.

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Restrictions on Use of Funds

IRS regulations state that not more than 5% of net bond proceeds may be used for private business use, or unrelated trace or business activity to the non-profit purpose of the borrowing institution. An example of what may be considered private business use might be physician offices located within a hospital, or a bank branch within a building in a university student center building.

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Eligible Projects

Capital Projects

CHEFA can finance an institution's capital projects and related costs, so long as the project is related to the tax-exempt purpose of that institution. These projects may consist of larger components such as acquisition, construction, renovation, furniture and equipment and other capital needs, as well as smaller elements including computers, telecommunications equipment and health care technology. Other eligible projects include refinancing outstanding taxable or tax-exempt debt, mortgages and loans.

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Eligible Institutions

The Connecticut Health and Education Facilities Authority is a quasi-governmental agency created in 1967 to help Connecticut-based non-profit organizations raise the funds needed to meet their goals of improving the health and education of the citizens of this state.

We provide support by acting as an intermediary for the issuance of tax-exempt bonds on behalf of all types of health and education facilities; including hospitals, nursing homes, day care centers, independent schools, state-chartered and higher education facilities.

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The Bond Issuance Process

There are many milestones in the timing of a bond issue financing. Please refer to the section on for more information for each phase of financing. Some basic steps include:

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Tax-Exempt Equipment Loan Program (EasyLoan)

CHEFA provides a tax-exempt financing alternative for the purchase of capital equipment and associated improvements. The program features an abridged application process, standardized loan documentation, and reduced financing fees compared to a traditional bond financing. The issue is privately placed with one lending company.

The EasyLoan Program utilizes a secured equipment loan structure where the commercial lender will loan the money, through the Authority, to the institution, and take a lien on the equipment and other financed improvements as collateral.

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Tax-Exempt Equipment Leasing Program (EasyLease)


The Authority provides a tax-exempt financing alternative to expensive taxable vendor or commercial financing for the purchase of capital equipment.

The program features an abridged application process, standardized loan documentation, and reduced financing fees compared to a traditional bond financing. Debt issued through the EasyLease Program is secured by the assets financed and the issue is privately placed with a leasing company through a competitive bid process.

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