Case Study:Chesapeake Bay Foundation

6 Herndon Avenue Annapolis, MD 21403

Founded in 1966, the Chesapeake Bay Foundation (CBF) is the leading estuarine protection organization in the United States. At the time of its most recent long term debt financing in 2013, CBF had a staff of 184 and operated across six offices and 15 environmental education centers located in Maryland, Virginia, Pennsylvania and the District of Columbia. CBF is supported by more than 200,000 members and e-subscribers and its Education Program has served over 1.5 million people.

Project Overview

CBF’s project involved borrowing $14.5 million to refinance its outstanding tax-exempt debt and related interest rate swap, fund costs associated with the development of the Brock Environmental Center in the City of Virginia Beach, and fund transaction and other miscellaneous costs associated with the financing.

Financing Overview

CBF’s financing comprised a combination of long term tax-exempt and short term taxable debt. The $6.2 million tax-exempt component was variable rate hedge by an interest rate swap and was used to refinance CBF’s existing debt. The second component was an $8.3 million taxable variable rate loan used to finance the development of the Brock Environmental Center. The taxable loan was structured to be repaid with capital campaign receipts as and when received by CBF.

Wye River Group’s Role

Wye River had the privilege of working closely with a select group of CBF Board members and management to assess CBF’s debt capacity and plan its project debt financing. Our services included:

Preliminary project planning including an assessment of debt capacity
Development of a comprehensive Finance Plan for the Project
Solicitation, evaluation and selection of candidates to provide banking services for the CBF’s financing
Negotiation of terms of the financing with CBF’s selected lender
Termination of existing swap and execution of new swap with CBF’s selected lender (which included the “blending” of the termination amount into the new swap and negotiated terms)
Closing logistics including the development of the final “Flow of Funds” memorandum and supporting tax calculations for bond counsel and the issuer of CBF’s bonds

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