New Jersey revives lease financing option for higher education

Private colleges and universities in New Jersey will regain a financing option that has lain dormant for eight years.

The New Jersey Educational Facilities Authority board unanimously voted in late November to reauthorize its tax-exempt leasing program to offering the institutions a low-cost financing option for capital needs.

The board’s re-authorization allowed the NJEFA to update and modernize program documents that were created more than a decade ago. The last transaction under the authority’s original leasing program closed in February 2011.

“Our newly configured leasing program addresses our client institutions’ continuing need to replace equipment, computers, software, vehicles, and educational space and adds another service to the array of services already provided by the NJEFA,” Eric D. Brophy, the authority’s executive director, said in a statement. “We look forward to working with our partners in higher education and the State as we continue to identify and implement more creative and valuable financing solutions for our colleges and universities.”

Brophy told The Bond Buyer after he assumed the NJEFA leadership role in September that resurrecting the Authority’s tax-exempt leasing program was one of his goals. The veteran municipal law attorney, who previously spent 11 years as a partner at Diegnan & Brophy, is also focused on helping institutions develop increased public-private partnership opportunities via the state's new P3 law and collaborating with the state’s libraries on a new grant program.

The NJEFA was founded in 1966 and has completed 515 transactions totaling nearly $18 billion with zero defaults. The conduit issuer had a record setting year in 2017 aided largely by refunding volume with $1.42 billion of bonds sold in 10 transactions. It did not come to market in 2018.