Private Activity Bonds - Are They Your Ticket To Success?

Private Activity Bonds ("PABs") represent construction phase financing and permanent financing for real estate development projects.  Rainmaker Marketing Corporation provides project sponsors (developers and/or owner/operators - typically referred to as the "developer/sponsor") with the due diligence reports necessary to substantiate a PAB application including:

• Market Feasibility Studies.  Every development project is required to provide demonstrable evidence of market acceptance for the proposed project.

• Pro Forma Financial Presentation.  The findings of the market feasibility study is used as the basis for projecting the operating and non-operating cash flows of the proposed project.  Typically, the pro forma financial presentation covers a 5-year forecast window and provides comprehensive detail for each line item and month of the forecast period.

• Capital Funding Plan Proposal.  The pro forma financial presentation is summarized in the form of a capital funding plan proposal that is used by the investment bankers to solicit institutional investor participation (i.e.: investment bankers solicit the bond sales).  This document contains the order of funding and the order of retirement for each of the sources of funds used to capitalize the project.  This is the heart of the beast and the capital funding plan will frequently incorporate multiple items that are based upon the potential incentives the proposed project may be able to capture and is frequently overlooked - much to the eventual dismay of the developer/sponsor.