Calaveras County: DLR has closed on two land-secured refundings for Saddle Creek, a golf community in the Sierra Nevadas. The Sales and Trading Desk found buyers who understood the developer’s long-term strategy.  •  Palmdale: DLR was sole Senior Manager on federally taxable Certificates of Participation so the city could acquire 600 acres for a 550-megawatt power plant to attract and retain businesses.  •  Chowchilla: DLR senior-managed a special bond for critical infrastructure improvement until development impact fees can be raised to support $93 million in residential, commercial and industrial projects.  •  Pittsburg: DLR was Senior Manager on a tax-allocation bond that raised almost $100 million for housing and other projects, and saved the city’s Redevelopment Agency another $3.5 million by refinancing earlier bonds.  •  Chula Vista: DLR senior-managed a tax-allocation bond after Chula Vista demonstrated that the future assessed value of the city’s Bayfront-Town Centre offsets a highly concentrated tax base.  •  Los Angeles: As book-running Senior Manager, DLR structured a $34.5-million pooled financing for the city’s Community Redevelopment Agency without a yield spread to adhere to the CRA policy to complete separation between project areas.  •  DLR senior-managed refunding of all outstanding debt at Ontario Airport, increasing the L.A. Department of Airports’ flexibility to define net revenues and its debt-service reserve fund – and reaffirm its “A” rating.  •  Long Beach: The city recently issued more than $190 million in redevelopment project financing, including $115 million of taxable bonds, in a Marks-Roos pooled issue to fund projects in five areas.  •  From naval base to housing space: Few could envision a new community when the Alameda Point Naval Air Station was decommissioned a decade ago. Today, a highly successful development with 300 homes occupies part of the old base.  •  Riverside County: DLR senior-managed a $25-million Mello-Roos financing to improve street, water, sewer, and other public facilities at Lake Hills Crest, a development with 512 single-family detached units.
 

Pooled Financing for L.A. Redevelopment

$34,500,000
Community Redevelopment Financing Authority of the Community Redevelopment Agency of the City of Los Angeles
Pooled Financing Bonds, Series M (Taxable)
In June 2006, De La Rosa & Co. served as book-running Senior Manager on the $34.5-million pooled financing for the City of Los Angeles’ Community Redevelopment Agency. De La Rosa presented several structuring options to meet CRA objectives, including the use of a 1% yield spread at the Financing Authority level to enhance the overall credit. DLR structured the financing without a yield spread to adhere to the agency policy of maintaining complete separation between project areas.

De La Rosa structured a step-down additional bonds test (ABT) for each project area to obtain investment-grade rating and economical bond insurance from Radian Insurance. The step-down ABT also means the test will be reduced to the typical 1.25X as each project area matures, allowing CRA to fund additional projects. The financing was structured to minimize the current borrowing cost and protect the future bonding capacity of each project area.

The DLR Sales and Trading Desk achieved superior pricing on the CRA bonds than another underwriter was able to on similar taxable bonds a few days later. In fact, the agency’s bonds were viewed as a weaker credit because they had a lower underlying rating (“BBB”) than the competing bonds (“BBB+”). The firm’s ability to price the 2036 term bond at a more aggressive spread to Treasury saved the CRA – and each project area – significantly because most of the principal of both loans occurred in the second term bond.
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