Tax-exempt financing is complex by its very nature and accordingly a public finance specialist is needed, in order to assure the bank that its tax-exempt financing proposal anticipates all structural components needed based on the nature of the nonprofit and based on the particular details of the loan request.

Pricing can be a very competitive aspect of the bank’s offering and an experienced public finance person is needed to assure the bank’s proposal will be be competitive. The bank’s corporate organization (Chapter C or S) is crucial to the rate setting process. In addition, choosing the right issuer will determine whether the transaction can be bank-qualified, which will impact the bank’s after tax return.

Persuading the issuer to cooperate and negotiating the issuer’s fee can also make a qualitative difference between whether your bank or another is selected by the nonprofit. Also, a person needs to meet with the issuer at the outset in order to create a proper and suitable expectation for the issuer.

The selection of bond counsel is frequently allotted to the issuer, but substantial discounts are available if the issuer can be persuaded to allow MHC’s customary born attorney to document the transaction.

Many of these tasks can also be completed by bond counsel, but at a cost to the borrower that is greatly higher due to the substantial difference between MHC’s effective hourly rate and a typical law firm. In both cases the nonprofit client pays these costs, although depending on how you decide to staff the transaction, a substantial amount can be saved by using MHC.

Finally, and most importantly, if MHC is engaged by the bank to assist it in winning the award to proceed with the transaction, the bank will benefit by MHC’s experience in persuading nonprofit boards and senior management to engage it in approximately 300 transactions over the past 25 years. I believe that I have become the most experienced investment banker in completing tax-exempt financings and refinancings on behalf of nonprofit organizations.