Maui School Financing

Maui School Financing

Prassas Capital has closed a tax-exempt private placement for the Montessori of Maui independent school.  The proceeds of the financing will be used to finance new classrooms, a multi-purpose facility, and site preparation and improvements.

As a small, unrated, first-time borrowing, the financing accomplished important objectives that were simply not possible with other alternatives:

•    Immediate funding to lock-in escalating construction costs.

•    Thirty-year fixed rate financing, eliminating future interest rate refinancing risk and simplifying the budget process.  Commercial banks and other conventional sources offered only 7-10 year fixed rate financing.

•    Tax-exempt borrowing rate of 5.50% is significantly lower than conventional lending sources.

•    A tax-exempt private placement (negotiated and placed directly with one mutual fund) avoided substantial underwriting, credit enhancement, and legal fees, achieving an all-in bond rate about 100 basis points lower than a traditionally underwritten bond issue.

*Prassas Capital acted solely as a financial advisor to this transaction.

For more information, please contact us.