Substantial Savings Generated through Refinancing Existing Bond Debt
Several financial drivers were behind the decision to refinance the Guttmacher Institute’s existing bond debt, which was originally issued in 2007 for leasehold improvements to the 125 Maiden Lane office condominium.
Why Refinance?
Increasing liquidity, avoiding tedious annual bond compliance, and taking advantage of lower interest rates on $8,550,000 of debt were at the top of the list of our client’s concerns. In 2020, securing significant operational savings was paramount, considering the pandemic’s impact on the Institute’s budget.
We also considered our client’s need for a simple, straightforward, pared-down financing process. This meant expediting the approval and closing processes and keeping closing costs to a bare minimum.
About the Institute
The Guttmacher Institute, Inc. is a prominent research and policy organization that advances sexual and reproductive health and rights. Based in NYC and Washington, DC, the Institute’s staff of 120 conducts programming, publishes, and advocates on both national and international stages.
Right Time, Right Solution
For a two-year period, ThinkForward monitored the markets for the Institute and analyzed financing opportunities until an optimal solution presented itself. The choice to move forward with taxable financing resulted in significant savings—above and beyond any tax-exempt alternatives. The Institute also avoided annual compliance and reposting requirements.
100% Debt Financing
We ultimately structured the refinancing to save the Institute $3M over 15 years. We reduced interest rates from 5.75% to 2.05%, fixed for term of the loan.
Furthermore, our client avoided substantial compliance and reporting requirements associated with tax-exempt financing. And, because we worked with a lender with no mortgage requirement, the Institute avoided sizable recording taxes by securing a negative pledge on the condominium. The Institute saved 2.80%.
Finally, we were able to deliver 100% debt financing, including closing costs.
Multiple Advisory Roles
In addition to serving as financial advisor, ThinkForward assisted the Institute with procuring SBA Paycheck Protection Program funding. This was not part of ThinkForward’s original scope of work. However, we were directed to increase cashflow, which meant thinking holistically about how to leverage all potential resources and relationships.
“ThinkForward was instrumental in making the bond refinancing happen. Sunil tirelessly marketed this transaction—even through pandemic financial chaos. This was a hugely significant accomplishment for the Institute, and I’m grateful for his efforts.”
— Maureen Burnley, VP Finance, Guttmacher Institute
Project Details
- Nonprofit social services
- Refinancing of NYCIDA bonds
- 2.05% taxable fixed rate (15 years)
- 15-year amortization schedule
