San Francisco Housing Authority Obtains $34 Million Financing for Green Upgrades from Crews & Associates, Inc.
Crews & Associates, Inc., a full-service investment banking firm headquartered in Little Rock, Arkansas with national operations, successfully funded the San Francisco Housing Authority's (SFHA) $34,190,000 Energy Performance Contract.
- (1888PressRelease) January 20, 2011 - LITTLE ROCK, Ark. - Once the upgrades are completed, SFHA anticipates saving $3.5 million in energy costs per year, and more than $60 million over the 20-year contract term.
Crews structured the 20-year transaction utilizing lease purchase financing. Standard & Poor's assigned an "A" credit rating to the transaction. A portion of the financing qualified for the Build America Bond Subsidy (BABs) which expired at the end of 2010. The American Recovery & Reinvestment Act provided for BABs as an alternative to tax-exempt financing. The interest rate for BABs is taxable to investors and generally higher; however, the federal government reimburses 35% of the interest cost to the borrower on each payment date, typically resulting in a lower net interest rate than the traditional tax-exempt approach.
"We were fortunate to the get the transaction closed by the end of the year, making it possible to take advantage of the Build America Bond Program, which will reduce the SFHA's borrowing cost significantly," said Edmond Hurst, Senior Managing Director of Crews & Associates' Capital Markets Group.
While the BABs program has expired, Hurst anticipates that there will be still be a considerable amount of energy conservation projects funded in 2011 with traditional tax-financing. "Even though we have lost that program and rates have risen somewhat, we still have historically low, attractive interest rates. Crews & Associates is actively seeking to fund more Public Housing Authority projects together with its traditional municipal finance business," said Hurst.
The Department of Housing and Urban Development promotes incentive programs to entice public housing authorities to undertake energy conservation measures to reduce both the amount of energy used in their buildings, as well as to provide residents an improved quality of life.
As part of this comprehensive project, the SFHA will remove older and outdated energy fixtures and infrastructure and replace them with state of the art lighting upgrades, plumbing fixtures, boilers, water heaters, and furnaces, decentralized heating fixtures, new insulation, building ventilation upgrades, weather stripping, temperature controls and setback thermostats, electric meter consolidation , photo luminescence, window and door replacement, trash compaction, biofuels for SFHA vehicles and boilers and geo thermal heat pumps. In total, thirty seven of the SFHA's housing sites will be improved by this project.
The San Francisco Housing Authority, in operation since 1938, is the longest standing housing authroity in California and is comprised of 6,653 public housing units.
For more information on the financing of this project, contact Edmond Hurst at (501) 978-7941 or ehurst ( @ ) crewsfs dot com or Mark Brown at (501) 978-6306, or mbrown ( @ ) crewsfs dot com dot
About Crews & Associates, Inc.
Little Rock-based Crews & Associates, Inc. is a full-service investment banking firm dedicated to the structuring, financing and distribution of fixed-income products nationally. Crews, founded in 1979, is a wholly-owned subsidiary of First Security Bancorp and has served as a managing underwriter for more than $33 billion in financings in 48 states across the country. www.crewfs.com
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