Public Finance

In August 2024, KeyBanc Capital Markets (KBCM) successfully closed approximately $96 million in Tax-Exempt 501(c)(3) Bonds for Purdue University – Fort Wayne. The proceeds will fund the design and construction of a new student housing facility.

Transaction Overview:
On Tuesday, April 2, 2024, KeyBanc Capital Markets (KBCM) closed an issuance of Tax-Exempt Revenue Bonds, Series 2024 (additionally secured by general obligation, without taxing power) (the “2024 Bonds”), for Suffolk Regional Off-Track Betting Corporation (SROTB). KBCM served as Sole Manager for the issuance, which totaled $342,680,000 in par. The proceeds of the 2024 Bonds will be used to (i) repay certain outstanding indebtedness of SROTB, (ii) finance the renovation, improvements, expansion, and furnishing of the Jake’s 58 Casino Hotel, to accommodate an additional 1,000 video lottery terminals and related gaming amenities, (iii) fund up a debt service reserve fund, and (iv) pay costs of issuance. The 2024 Bonds were not rated.

KBCM assisted SROTB through all aspects of the financing, which was its first municipal debt raise in the capital markets. KBCM helped structure the new security package to protect bondholders’ interests while allowing SROTB flexibility to operate and grow its business efficiently. 

After a competitive committee selection process, KBCM was selected as sole underwriter, thanks to KBCM’s very strong gaming investment banking practice and our extensive experience selling gaming-backed tax-exempt debt in the municipal market. To market the Bonds, KBCM used a Preliminary Offering Statement and Roadshow, educating investors on SROTB’s operations and all aspects of the bond issue. Working closely with SROTB, KBCM also coordinated dozens of one-on-one calls with investors to address questions about the offering and SROTB. On the day of the sale, KBCM built a very strong order book that allowed us to lower yields on the final pricing compared with what was expected prior to the order period. KBCM was also able to sell an issuer-friendly five-year par call option (as opposed to the standard 10-year par call option), providing valuable flexibility to SROTB.

Suffolk Regional Off-Track Betting Corporation:
Established in 1974, SROTB is a public benefit corporation that has two main lines of business: off-track wagering for thoroughbred and harness racing, and video lottery gaming entertainment and hospitality. SROTB’s operations are anchored by its flagship property — Jake’s 58 Casino Hotel on Long Island, about 50 miles from midtown Manhattan. 

Cain Brothers, a division of KeyBanc Capital Markets, Inc. served as Sole Manager in the public issuance of the $108,295,000 Wisconsin Health and Educational Facilities Authority Revenue Bonds, Series 2024A&B, on behalf of Three Pillars Senior Living Communities, rated “BBB” by Fitch Ratings. The proceeds of the Bonds, together with ~$13 million of equity from Three Pillars, will finance the third phase of its strategic master plan, which is the construction of a new campus with 110 Active Adult units and common areas.

The transaction consisted of ~$46 million of entrance fee bonds split into two series and 35-year fixed-rate bonds sized at ~$63 million. Cain Brothers worked closely with management and the development team to create a financing structure that balanced the goals and objectives of Three Pillars with unique security features attractive to investors, such as funding interest for 39 months. The Bonds received strong investor demand, generating $697 million of total orders from 22 unique accounts (6.4x oversubscribed).

Three Pillars is a nonprofit organization affiliated with the Masonic Grand Lodge of Wisconsin operating a Type-C CCRC in Dousman, WI. Three Pillars has operated for nearly 120 years and provides independent living, assisted living, memory care, short-term rehab, skilled nursing, and a community-based wellness center.

In 2017, leadership formulated a strategic master plan to address its residents’ changing needs and the shifting landscape for staffing and healthcare reimbursement. In 2021, Three Pillars financed the initial phase of the strategic master plan, downsizing its skilled nursing facility by converting its semi-private rooms to private rooms and adding higher-acuity assisted living.

The 2024 Expansion Project represented Three Pillars’ strategic response to challenges faced by single-site life-plan communities industrywide: seniors moving into LPCs older, more frail, and sedentary; persistent labor shortages of clinical labor; inadequate reimbursement from governmental payors, and reliance on non-operating income. The financing enabled Three Pillars to transform its business model to ensure long-term financial sustainability. Equally important, it solidified its value proposition to the local marketplace with a product that appeals to the seniors of today and the future.

On March 26, 2024, KeyBanc Capital Markets (KBCM) and the State of Ohio successfully closed a $173.97 million Infrastructure Improvement General Obligation Bonds, Series 2024A (the Bonds) transaction. The Bonds were rated Aaa/AAA/AAA by Moody’s, S&P, and Fitch, respectively. The financing structure consisted of serial bonds maturing from March 1, 2025, through and including March 1, 2043. A 10-year par call optional redemption date of March 1, 2034, was included to provide the State with flexibility to refund the bonds for interest savings in the future. KBCM served as Senior Manager on the transaction.

The Bonds are general obligations of the State issued by the Ohio Public Facilities Commission (OPFC) to finance or assist in the financing of the cost of public infrastructure capital improvement projects of local subdivisions.

The Ohio Public Facilities Commission is a body corporate and politic constituting an agency and instrumentality of the state. It is composed of six members, being the incumbents in the elective offices of Governor, Attorney General, Auditor of State, Secretary of State, Treasurer of State, and the OBM Director. The governor serves as the chair, the Treasurer of State as the treasurer, and the Director of Budget and Management as the secretary of the Commission. The OPFC acts as the issuer of the state general obligation debt authorized by the Ohio General Assembly that is backed by the General Revenue Fund.

On March 21, 2024, KeyBanc Capital Markets (KBCM) and the Troy City School District of Ohio (the District) successfully closed a $87.83 million School Improvement Bonds, Series 2024 (General Obligation) (Unlimited Taxes) (the Bonds) transaction. The Bonds were rated Aa2 by Moody’s. The financing structure consisted of serial bonds maturing from December 1, 2024, through and including December 1, 2044, and three (3) term bonds maturing December 1 in 2049, 2054, and 2060. A 10-year par call optional redemption date of December 1, 2033, was included to provide the District with flexibility to refund the bonds for interest savings in the future. KBCM served as Sole Manager on the transaction.

The Bonds were issued for the purpose of participating in the Ohio Facilities Construction Commission Classroom Facilities Program by raising the school district’s portion of the basic project cost and locally funded initiatives not exceeding one-half of the school district’s portion of basic project cost, by constructing three new PK-4 buildings and a new 5-6 building, including technology, site improvements, furniture, equipment, demolition and abatement of certain existing structures, landscaping and utilities.

The Troy City School District encompasses approximately 37 square miles and is in Miami County, which is bounded by Shelby, Champaign, Clark, Montgomery, and Darke Counties in western Ohio. Miami County is served by State Routes 41 and 55. It is approximately 20 miles north of the City of Dayton and has access to Interstate Highway 75. The District has 4,226 students in six elementary schools, one sixth-grade school, one junior high, and one high school (nine total schools). The major sources of revenue to the District are local property taxes on real and personal property, along with State aid.

On November 30, 2023, KeyBanc Capital Markets (KBCM) successfully closed $86.26 million in Tax-Exempt Parking System Revenue Bonds, Series 2023 (the Bonds) for UAkronPark Inc., a special-purpose entity formed by the Development Finance Authority of Summit County (the Authority) with Diogenes Capital serving as the Asset Manager. The Bonds are being issued to provide funds (i) for acquiring, constructing, furnishing, equipping, maintaining, and improving real and personal property, or any combination thereof, comprising the Parking System; (ii) to finance additional costs to improve the Project and the Parking System; (iii) to fund the Debt Service Reserve Fund for the Series 2023 Bonds, (iv) to fund capitalized interest on the Series 2023 Bonds, and (v) to fund the costs of issuing the Series 2023 Bonds. KBCM served as Sole Manager on the transaction.

On October 12, 2023, KeyBanc Capital Markets (KBCM) served as Sole Manager for $27 million par amount of Idaho Housing and Finance Association Nonprofit Facilities Revenue Bonds (The College of Idaho Project) Series 2023 (the 2023 Bonds). The 2023 Bonds were issued to (i) refund the College of Idaho’s (the College) Series 2016 bank debt; (ii) finance construction and renovation costs for campus facilities; (iii) fund a debt service reserve fund; and (iv) pay costs of issuance. As Underwriter, KBCM led an extensive due diligence and rating strategy process, obtaining a first-time, “BBB” public rating for the College from Standard & Poor’s. Additionally, KBCM was able to improve the College’s security and financial covenants under the 2016 Bonds by (i) releasing the mortgage on College-owned properties; (ii) eliminating the College’s debt coverage ratio; and (iii) improving liquidity covenants. The 2023 Bonds also lowered risk in the College’s debt portfolio through termination of an existing interest rate swap, paying off its existing floating rate bank debt subject to renewal risk, and locking in a fixed rate to create cash flow certainty.

The College was founded in 1891 by William Judson Boone and built on the mantra, “Let them come, let them all come, and we will see what they can do.” Accredited by the Northwest Commission on Colleges and Universities since 1922, the College was the first institution of higher education to begin operating in the state of Idaho and has over 130 years of experience. The 55-acre campus is adjacent to the historic district of Caldwell, approximately 30 minutes from downtown Boise. Facilities include 16 academic, athletic, student life and support buildings and five residence halls, along with suite-style apartments and rental houses adjacent to campus. The College offers undergraduate liberal arts and graduate education programs.

On October 3, 2023, KeyBanc Capital Markets (KBCM) and the Central Ohio Transit Authority (the “Authority” or “COTA”) successfully closed 30 million General Obligation (Limited Tax) Capital Facilities Bonds, Series 2023 (the Bonds). The Bonds were rated AAA by S&P. The structure consisted of serial bonds maturing from December 1, 2024, through and including December 1, 2043, a term bond maturing on December 1, 2048, and another term bond maturing on December 1, 2053. A 10-year par call optional redemption date of December 1, 2033, was included to provide the COTA with flexibility in the future to refund the bonds for interest savings. KBCM served as Sole Manager on the transaction.

The proceeds from the issuance of the Bonds are being used for purchasing, acquiring, constructing, replacing, improving, extending, and enlarging transit facilities that serve or will serve an area within COTA’s boundaries.

The Central Ohio Transit provides services in and around Columbus and neighboring communities.

On March 15, 2023, KeyBanc Capital Markets (KBCM) successfully closed the $89.93 million Series 2023 School Facilities Construction and Improvement UTGO Bonds (the “Bonds” or “2023 Bonds”) and the $30 million Series 2023 Certificates of Participation (School Facilities Project) (the “Certificates” or “2023 Certificates”) on behalf of Pickerington Local School District, Ohio (the District). The 2023 Bonds and Certificates carried underlying ratings of Aa2 and Aa3, respectively, from Moody’s Investors Service.

The Bonds were issued for the purpose of expanding, renovating, and improving Central High School and North High School; constructing, furnishing and equipping one junior high school; acquiring, renovating, furnishing, and equipping existing facilities or constructing, furnishing, and equipping new facilities for school district purposes; and repairing, improving, and maintaining existing school buildings and facilities and retiring notes previously issued for those purposes. The Certificates were issued for the purpose of constructing, improving, furnishing, and equipping of school facilities and the acquisition the land and interests in land.

The Pickerington Local School District covers approximately 37 square miles, primarily in northwestern Fairfield County, with a small portion extending into Franklin County. As of October 2022, the District served approximately 11,604 students in grades Pre-K through 12 in its 15 schools, and an additional 175 students who attend the Eastland-Fairfield Career Center on a full-time basis. The District offers a comprehensive and advanced curriculum and a wide selection of extracurricular activities at all levels.

On December 1, 2022, KeyBanc Capital Markets (KBCM) successfully closed the $205 million Sales Tax and Telecommunications Revenue Refunding Bonds, Series 2022 (the 2022 Bonds) on behalf of Utah Telecommunication Open Infrastructure Agency (UTOPIA). The 2022 Bonds were rated AA- by S&P and were used to refund UTOPIA's outstanding LIBOR-based Tax-Exempt Series 2011A and Taxable Series 2011B Bonds and provide funds to terminate related swap contracts. The excess proceeds will be used to finance the acquisition, construction, and installation of advanced communication lines, equipment and improvements, refreshment of major electronics, and related improvements and facilities as part of a fiber optic, open-access, advanced communications network. KBCM served as Sole Manager for the 2022 Bonds.

KBCM has a long-standing relationship with the UTOPIA/Utah Infrastructure Agency (UIA) – a component of UTOPIA. The UIA network is a fiber optic network of high-speed broadband voice, video and data access and includes fiber optic lines, transmitters, power sources and backups, switches and access portals. It operates as a wholesale network, under an open access model, which is available to all qualified service providers. Since its inaugural issuance in 2011, KBCM worked with UIA’s finance team, underwriting subsequent issues in 2013, 2015, and 2017 through and including 2022.

In November 2022, KeyBanc Capital Markets (KBCM) successfully closed $38 million in Senior Secured Credit Facilities composed of a $20 million, five-year Gaming Revolving Line of Credit, a $10 million, five-year Gaming Term Loan, and a an $8 million, five-year Government Term Loan for the Confederated Tribes of the Chehalis Reservation and the Lucky Eagle Casino & Hotel. KeyBanc Capital Markets was selected as Sole Lender on the transaction.

About The Confederated Tribes of the Chehalis Reservation
The Confederated Tribes of the Chehalis Reservation is a federally recognized Native American Tribe in southwest Washington on the border of Grays Harbor and Thurston County. Governed by a five-member Business Committee, the Chehalis Tribal government provides for the health, safety, and well-being of their more than 1,000 enrolled Tribal Members.

The Chehalis Tribe has created a diverse economic development program including gaming, hotels, convenience stores, and restaurants. The Tribe owns and operates Lucky Eagle Casino, Eagle’s Landing Hotel, the Great Wolf Lodge Resort and Talking Cedar Brewing, three convenience stores, a fast-food restaurant, and construction companies. The tribe employs more than 1,500 people in Grays Harbor and Thurston County.

On November 17, 2022, KeyBanc Capital Markets (KBCM) successfully closed $3 billion of Senior Secured Credit Facilities in relation to the John F. Kennedy Airport Terminal 6 Redevelopment. On March 24, 2018, the Terminal 6 Consortium of Vantage Airport Group, RXR Realty LLC, JetBlue Airways and American Triple I Partners was designated by the Port Authority of New York & New Jersey as the preferred developer to redevelop the new terminal. Terminal 6 is a $4.2 billion construction project for a period of 30-year lease agreement. KBCM served as Coordinating Lead Arranger and Swap Provider on the transaction.