Long Beach Tackles Blightl

$192,432,306
Redevelopment, Housing and Gas Utility Financings
Taxable Revenue Bonds

$47,780,000
Downtown and West Long Beach Industrial Redevelopment Project Areas
Taxable Revenue Bonds

$77,715,000
Downtown, North Long Beach, Poly High, and West Beach Redevelopment Project Areas
Taxable Revenue Bonds

De La Rosa & Co. recently served as Senior Manager for a Long Beach Redevelopment Agency issue topping $190 million, including $115 million of taxable bonds. The transaction was a Marks-Roos pooled financing: the City's Bond Finance Authority received a pooled revenue bond, and the LBRA issued underlying bonds for their Central, Los Altos, North Long Beach, West Beach and Poly High Project Areas. The financing also included the Agency's first housing set-aside revenue bonds and a small refunding for the municipal gas utility, which was related because the Agency pays half the debt service on those bonds.

This issue took advantage of a 1% yield spread allowed under the Marks-Roos law. The yield on the underlying LBRA agreements was structured to be 1% higher than the yield on the Financing Authority bonds. The spread added coverage for the Authority bonds. Except for the allowable 1% spread, the issue was not cross-collateralized.

Long Beach chose De La Rosa as Senior Manager based on our ability to structure and sell complicated tax-increment issues in the past. In 2002, the firm co-managed a similar Marks-Roos financing. Our responsibility was to secure bond insurance for the transaction, which grew increasingly complex due to significant credit issues in each project area. We ultimately obtained an insurance bid from Ambac, and the bonds were sold with an "Aaa/AAA" rating. LBRA was able to start a project area in North Long Beach, refinance and issue new money for West Beach, issue new money for Poly High, and refinance outstanding high-yield bonds for Downtown.

Based on that success with the Series A bonds, the LBRA accepted De La Rosa's proposal to refund additional Downtown debt, finance new projects and complete a refunding for the West Long Beach Industrial Project. The firm was Senior Manager on that 2002 transaction.

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