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| Deal Profiles |
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McGuire
Air Force Base/Fort Dix
Privatized Military Housing Project
Taxable Military Housing Revenue
Bonds First Mortgate Lien Bonds,
Series 2006
$274 Million
 In
1996, Congress passed the Military
Housing Privatization Initiative,
which paved the way for privately
financed and built military housing,
constructed to market standards.
MBIA has been a leading participant
in the privatization effort. Recently,
the company teamed up with Goldman
Sachs and United Communities LLC,
the developer/management company,
to guarantee the largest Air Force
rental privatization project done
to date: McGuire Air Force Base
/ Fort Dix. Located next to each
other in southern New Jersey,
McGuire AFB and Fort Dix have
proven vital in the deployment
of troops and supplies to Iraq
and other parts of the Middle
East. As the only AFB located
near the coast in the Northeast,
McGuire is a critical deployment
and cargo transport center. Fort
Dix is an important training and
mobilization installation for
all military branches, located
within 200 miles of over 25% the
nation’s Army Reserve and
National Guard. Very significantly,
McGuire and Fort Dix are physically
and operationally integrated and
serve as a model for joint military
operations.
Land, along with some 2,364 existing
family homes, was transferred
at no charge under a 50-year land
lease by the government to the
developer. The revitalization
calls for demolition of 1,915
homes (many dating to the 1950’s),
the construction of 1,635 new
units, major renovation on 14
historic buildings and minor renovation
on 435 homes. At the end of the
project, a total of 2,084 homes
will provide exceptional amenities
compared with comparably priced
units in the local market, as
well as community centers and
infrastructure.
The project will be funded primarily
by $274 million in taxable, fixed-rate
bonds. Other sources of funding
include $17.6 million in developer
equity, a $46.7 million subordinate
loan from the government, net
operating income from existing
housing and investment earnings
on bond proceeds. The bonds are
rated AA- by S&P and have
a 45-year final maturity. To increase
marketability, the bonds were
wrapped with MBIA’s Triple-A-rated
financial guarantee.
The resulting offering achieved
unprecedented placement and pricing
results. Marketing of the 45-year
term bonds, accomplished as a
144A offering to qualified institutional
buyers, was an extraordinary success.
With less than one week of pre-marketing,
the underwriter was able to attract
eleven different buyers at an
aggressive 90 bp credit spread
to the long Treasury bond –
the lowest spread achieved by
any Air Force deal to date.
Today, military housing is a $16
billion market, of which 78% is
insured. MBIA has guaranteed approximately
60% of the insured market. Since
2001, MBIA’s portfolio of
military housing transactions
has grown to over $7.7 billion.
Other projects include the $1.3
billion Army Hawaii Family Housing
transaction, the $665 million
Navy Pearl Harbor-Ohana project,
and a $1.5 billion UK Military
privatization initiative.
For more information, please contact:
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Copyright ©2007 MBIA INC. |
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