ORIX Municipal Finance will purchase up to $21.8 million of tax-exempt senior lien revenue bonds to finance the construction of a 133-unit senior living facility (assisted living & memory care) on the campus of a prominent local church. The $30.0 million capital stack also included $2.7 million in subordinate bonds and $5.6 million in equity. The Bonds are secured by a first mortgage on the property, a gross revenue pledge, a debt service reserve fund and other operating reserves.
The Bonds were issued as draw down bonds where ORIX will purchase the Bonds periodically over the course of the 14-month construction period to fund monthly construction draws, a capitalized interest account and a debt service reserve fund. The draw down bond structure significantly reduced negative arbitrage in the capitalized interest account and the total proceeds needed to finance the project.