The Aurora Christian School (the “School”) was founded in 1975 as a private Christian coeducational school located 40 miles from Chicago in Aurora, Illinois. The School currently serves approximately 617 students in preschool through 12th grade.
The School had originally borrowed $18,200,000 in tax exempt bonds in 2004 to finance the purchase and renovation of its existing Aurora campus. GATES Capital was engaged by the School to identify, examine and implement a debt refunding plan related to these Bonds that would to restructure / lessen existing financial covenants, eliminate bank renewal risk, provide cash flow savings and create flexibility with regards to security collateral.
Solution and Execution
GATES Capital was able to structure a $13,250,000 in refunding in two series of bonds issued by the Upper Illinois River Valley Development Authority to refund the existing debt. The refunding bonds were sold in a limited offering to an institutional investor at a long-term blended interest rate below 5.00%. Additionally, due to the novel structure of the taxable B bonds that GATES underwrote, the School has the flexibility to release the collateral of its off-campus property should the School find it economically advantageous to sell such.