The Launch Bond™ is an early-stage financing developed by Launch Development Finance Advisors that represents a financing solution to bridge the gap between upfront infrastructure expenditures and revenue events. The Launch Bond was developed solely to provide another financing tool for the development and homebuilding communities to assist in the financing of infrastructure and/or the return of capital.
Texas MUD Forward Funding Launch Bonds
A Texas MUD Forward Funding Launch Bond is early-stage non-recourse, tax exempt Municipal Utility District (“MUD”) receivable financing and represents a financing solution to bridge the gap between infrastructure expenditures and MUD reimbursements.
The Texas MUD Forward Funding Launch Bond™
The Texas MUD Forward Funding Launch Bond is the original financing concept developed by Launch Development Finance Advisors to bridge the fissure between the heavy upfront infrastructure spend and the receipt of future MUD reimbursements.
Attributes of The Texas Forward Funding Launch Bond™ include:
Only applicable to Texas.
Tax Exempt Bond (Estimated Interest Rates from 5.5% to 7.5%).
Non-Recourse to the developer.
No Developer and/or corporate guarantees required.
May be structured as a capital appreciation or current pay bond.
Does not encumber the project lands.
Secured only by pledge of future MUD bond proceeds.
May be configured in multiple different bond structures to accommodate developer financing goals.
Accelerated payback of Launch Bond accrues to the benefit of the Developer.
Other Financing Solutions
In an attempt to lower the overall cost of development capital, Launch professionals have developed other financing sources to allow the financing of public and private infrastructure.
The Land Secured Launch Bond™
The Land Secured Launch Bond™ is structured as a long-term construction financing that allows the Developer to fund the construction of infrastructure from bond proceeds and has a long term repayment period versus a typical construction loan.
Attributes of The Land Secure Launch Bond™:
Available anywhere in the United States.
TaxableBond (Interest Rates from 10% to 12%).
Land Secure Bond.
Non-Accelerated lot / parcel release provisions.
Non-recourse to the developer.
No Developer and/or Corporate guarantees required.
May be configured in multiple different bond structures to accommodate developer financing goals.
Accelerated payback of The Launch Bond™ accrues to the benefit of the Developer.
The Land Secured Taxable Launch Bond is a new financing to front the construction of grading and horizontal infrastructure necessary to activate a new development. While a taxable instrument, the terms of the bond are favorable to that of third party debt and equity.
Recent Launch Bond™ Transactions
Hillwood Communities / Valencia
$46,985,000
Bond Type – Current Interest Bond
Total Par Amount – $46.985MM
Reserve Fund – $2.5MM
Capitalized Interest – $0.25MM
Net Proceeds – $42.3MM
Coupon Rate – 5.3%
Yield – 5.3%
Maturity Date – 12/1/2032
Caldwell Cos. / The Highlands
$48,180,000
Bond Type – Current Interest Bond
Total Par Amount – $48.18MM
Reserve Fund – $2.5MM
Capitalized Interest – $0.4MM
Net Proceeds – $43.2MM
Coupon Rate – 5.125%
Yield – 5.125%
Maturity Date – 12/15/2030
Starwood Land / Multiple Projects
$164,990,000
Bond Type – Current Interest Bond
Total Par Amount – $164.99MM
Reserve Fund – $9.07MM
Net Proceeds – $150.0MM
Coupon Rate – 5.50%
Yield – 5.50%
Maturity Date – 12/15/2028
Johnson Development Services / Candela
$40,790,000
Bond Type – Current Interest Bond
Total Par Amount – $40.8MM
Reserve Fund – $2.5MM
Net Proceeds – $36.2MM
Coupon Rate – 6.125%
Yield – 6.25%
Maturity Date – 12/15/2029
Randolph Texas / Lariat
$35,500,000
Bond Type – Capital Appreciation Bond
Total Par Amount – $35.5MM
Net Proceeds – $33.2MM
Coupon Rate – 7.5%
Yield – 7.76%
Maturity Date – 9/1/2029
Launch Development Finance Advisors
Launch Development Financing Advisors is a transactional based real estate consulting firm representing the private sector in matters of public finance. The mission of Launch Development Financing Advisors is to assist our clients in the financing of infrastructure, reduction of the costs and the mitigation of risk, all with the goal of enhancing project profitability and returns.
For more information on Launch Development Financing Advisors visit our website at www.launch-dfa.com.
For Further Information
For more information on how The Launch Bond™ may assist with your project infrastructure financing, contact Carter Froelich
