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INNOVATIVE SOLUTIONS. PROVEN RESULTS. COLUMBIA

Roosevelt University, a private non-profit university in Chicago, engaged Columbia Capital in early 2009 to assist in developing a comprehensive plan of finance for the University's planned development of a 32-story, 165,000-square foot “vertical campus” in Chicago's South Loop. The financed facility includes academic and student services, classrooms and laboratories, more than 600 beds of student housing, administrative offices, and dining and laundry facilities. Total project costs are expected to be approximately $150 million.

Columbia faced a number of significant challenges in developing the plan of finance: (1) constructing a long-term financial pro forma illustrating the affordability of the project; (2) addressing the covenants contained in the letters of credit supporting the University's 1995, 2000 and 2002 variable rate bonds; and (3) demonstrating to the rating agencies that a near-tripling of the University's debt was justified by the University's operating and financial fundamentals. Planning for the project on the heels of the municipal market near-shutdown in the fall of 2008 was a key complication. In November 2009, the University successfully sold $183.6 million in bonds through the Illinois Finance Authority to pay project costs and refund its outstanding variable rate bonds. Despite the start-up characteristics of the University’s financials post-issuance, the University suffered only a one-notch downgrade from each rating agency, resulting in Baa2/BBB+ ratings at issuance.

Columbia had an integral role in all facets of the transaction’s planning and execution: preparing the plan of finance; managing competitive processes for selection of the underwriting team and trustee; working closely with counsel on legal, sale and offering documents; preparing board briefings and staff analysis; presenting the credit to the rating agencies; assisting with the Illinois Finance Authority approval process; negotiating the terms and conditions of the bond sale with the managing underwriter; assisting with the successful closing; bidding investments for bond proceeds; and preparing arbitrage rebate analysis on the refunded bonds.

Columbia served as the university’s swap advisor, negotiating successful terminations of both the SIFMA and percentage of LIBOR fixed payor swaps. Columbia advised the university on both mid-market valuations, as well as reasonable dealer spreads for the termination.

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