Tax-Exempt Bond Financing
CHEFA offers a choice of tax-exempt financing programs for eligible nonprofit organizations. Bond offerings can be publicly sold or issues as a private placement, unenhanced or with credit enhancement, bear interest at fixed or variable interest rates, and have a maturity of not greater than fifty years.
Structure, Fees & Timing
- Bond Issuance Types: Public, Limited Public and Private
- Size: $5M
- Term: 3-50 years
- Fixed or Variable Rate
- Estimated Legal: ~2% of financing amount
- Timing: 8-12 weeks depending on complexity
Eligible Uses
- Capital Projects
- Including acquisition, construction, renovation, furniture, equipment, technology
- Refinancing of existing debt
- Cost of Issuance (maximum 2% of proceeds)
- Capitalized Interest
- Debt Service Reserve Fund
- Up to 5% of bond proceeds may be used
- Facilities that provide non sectarian services
- Limited allowance for working capital
Closing Date: January 22, 2026
Borrower: Trinity College
Purpose / Description: Funding for improvements to athletic facilities, student housing and academic facilities, Also, refunded existing debt.
Par Value: $40.5 million
All in TIC / Interest Rate: 4.77%
Underwriter / Bank: Barclays
Closing Date: October 29, 2025
Borrower: Area Cooperative Educational Services
Purpose / Description: Capital projects at schools and refinancing of debt
Par Value: $35.6 million
All in TIC / Interest Rate: 4.27%
Underwriter / Bank: KeyBanc Capital Markets
Closing Date: October 29, 2025
Borrower: Duncaster, Inc.
Purpose / Description: Capital projects on campus
Par Value: $15.0 million
All in TIC / Interest Rate: 5.02%
Underwriter / Bank: Ziegler
Closing Date: February 11, 2026
Borrower: Hartford Healthcare
Purpose / Description: Capital projects, acquisitions and refunding of debt
Par Value: $850 million
All in TIC / Interest Rate: 4.47%
Underwriter / Bank: Morgan Stanley
Tax-Exempt Bond Financing Process
1) Financing Request / Proposal
- Borrower works with Underwriter/Bank to submit develop financing summary outlining their proposed project and needs
- CHEFA can recommend an underwriter should an organization not have specific banking coverage
- Review of project scope and determine eligibility for tax-exemption
- Assembly of the transaction working group
2) Diligence and Documentation
- Completion of due diligence by CHEFA, Bond Counsel and Underwriter
- Preparation and review of legal documentation
- Public Hearing (TEFRA)
- Borrower submits application and CHEFA fee
3) Board Approvals
- Number of approvals dependent on issuance type
- Public and Limited Public Offerings require a preliminary and final Board approval
- Direct bank purchases require a single board approval
4) Marketing and Finalization of Documentation
- Financing documents published and shared with investors for marketing purposes (if applicable)
- Transaction summary submitted to the Governor of Connecticut for review and approval
5) Closing and Funding
- Bonds sold to Investors in either a private or public manner
- Financing documents are executed
- Funds available to Borrower
6) Post-issuance Compliance
- CHEFA assists Borrowers in preserving tax-exempt status of the bonds. This may include:
- Monitoring Use of Proceeds
- Monitoring Covenant & Disclosure Compliance
- Arbitrage Rebate and Yield Restriction Compliance
