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The Plainfield Housing Authority through it’s 11(b) corporation, the Plainfield Housing Finance Corporation, undertook a refunding of it’s outstanding $5,300,000 bond issue for the Liberty Village Apartment Project consisting of 11% Series A Bonds and 13% Series B Bonds. The underlying Section 8 project was owned by the Corporation and managed by the Housing Authority.
The refunding was accomplished using a structure consisting of pari pasu issuance of tax exempt and taxable bonds with 5.5% of the bonds being taxable and the balance being tax exempt. The new bonds were marketed with an “A” rating based upon the Section 8 contract and a first mortgage on the property. No credit enhancement of FHA insurance was used. The Authority obtained significant savings from this refunding which it will use to fund new housing initiatives.