Housing Authority of the City of Bridgeport

The United States Department of Housing and Urban Development (“HUD”) spends approximately $6.4 billion each year assisting housing authorities across the country and their tenants with utility bills. HUD established incentive programs to encourage Public Housing Authorities to take on Energy Performance Contracting (“EPC”) to help reduce these utility costs. Normally offered by Energy Service Companies (ESCOs), this innovative financing technique allows building users to achieve energy savings without upfront capital expenses. The costs of the energy improvements are financed on the front end and paid back out of the energy savings and the HUD incentives for a period up to 20 years.

The challenge was that accessing long-term equipment lease financing for such projects was difficult for PHA’s like the Housing Authority of the City of Bridgeport, CT.

The Solution

Crews structured and funded a unique financing to implement the largest single energy efficiency investment in Connecticut public housing history for the state’s largest public housing authority. The transaction was the first public housing authority in the country to have a financing transaction rated through Standard & Poor’s Issuer Credit Rating process and received an investment grade rating of “A”.  Crews publicly offered and sold participations in a $21,000,000 lease purchase agreement utilizing a securitization approach and was able to sell them into the publicly offered municipal bond marketplace.

The Difference

Crews worked hard to serve our client in extraordinary ways by:

  1. Obtaining a low interest rate for a long-term equipment lease financing by accessing the traditional municipal bond market;
  2. Successfully securing funding for this financing in the midst of the Great Recession;
  3. Providing debt service terms that were lower that the anticipated energy savings from the project, allowing for improvements to more than 2,500 units.