Holley & Pearson-Farrer LLP served as co-bond counsel to the Dormitory Authority of the State of New York (DASNY) on a unique forward-delivery transaction. DASNY issued a series of tax-exempt revenue bonds as a conduit on behalf of the top graduate school of education in the country. These bonds financed roof repairs and replacement, HVAC upgrades, classroom renovations, and general deferred and preventative maintenance projects for Teachers College, which serves as Columbia University’s graduate and professional school of education. Proceeds of the bonds were also applied to refund two series of bonds previously issued for Teachers College.

The bonds were issued on a forward delivery basis. While a standard bond purchase agreement contemplates a bond pricing and a subsequent issuance of the bonds within a short time frame, in a forward delivery bond issuance, the underwriter agrees to price and contract to purchase the bonds on an initial closing date and to take delivery of the bonds at a final settlement date, subject to compliance with certain conditions outlined in the forward delivery bond purchase agreement. Forward delivery bonds come with a premium because of the underwriter’s commitment to purchase the bonds at a future delivery date, but offer the benefit of a hedge against interest rate risks, allowing sophisticated issuers to lock in savings.

The bonds were sold in June 2021, and the transaction closed in April 2022, when the issuance would qualify as a current refunding. While the forward delivery resulted in a forward yield premium, the delayed delivery structure allowed Teachers College to issue tax-exempt refunding bonds while taking advantage of then-current interest rates, resulting in savings amounting to approximately 18.5% of the refunded bonds.

H|PF Role
  • Financed campus upgrades and renovations for Teachers College
  • Forward delivery transaction
$50.9 million
Dormitory Authority of the State of New York

Teachers College, New York, New York

Closing Date
June 2021 (initial closing) / April 2022 (settlement)
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