Capital Financing 501 is a tax-exempt commercial paper program that provides Massachusetts 501 (c)(3) institutions with a low-cost source of capital that can be borrowed and repaid efficiently.

1. Capital Financing 501
The Sage School in Foxborough Tax-Exempt Commercial Paper Financing
is using $2,250,000 from the Capital Financing 501 is a tax-exempt commercial paper program that provides
Massachusetts 501 (c)(3) institutions with a low-cost source of capital that can be
Capital Financing 501 program to
borrowed and repaid efficiently.
purchase and renovate a
building the School had Program Specifics
previousl y leased. The school Eligible Organizations
Massachusetts based 501 (c)(3) nonprofit institutions.
plans to renovate the space and
add classrooms, administrative Projects Eligible for Financing
offices, and a gymnasium in the Suitable projects include land or building acquisition, new construction, renovation,
and equipment, as well as maintenance, repairs and ongoing capital expenditures.
next several years.
Capital Financing 501 can provide permanent or interim financing for large-scale
projects that may be subsequently refinanced on a stand-alone basis or repaid through
“We are pleased to partner with other sources such as grants or gifts.
Citizens Bank and
Structure
MassDevelopment for our Borrowers gain approval from the letter of credit bank for credit enhancement of a
expansion initiative. These maximum amount that can be borrowed under a borrower reimbursement agreement
campus-wide improvements and subsequent loan agreements. Letters of credit are available in minimum amounts
of $3,000,000, initially valid for up to five years and extended upon satisfactory
will greatly enhance our mission,
review.
curriculum and extracurricular The term of each loan agreement (final maturity) is a function of the useful life of the
offerings allowing us to better assets financed and the amortization schedule.
prepare our students for Amounts outstanding from all borrowers are aggregated by the dealer and sold to
investors as letter of credit supported tax-exempt commercial paper.
success in the future.”
Fees
– Katherine G. Windsor, Head There is a $500 application fee.
An issuance fee of .50% is deducted from amounts borrowed, and an annual
of School, The Sage School
administration fee of .40% is charged on outstanding principal. These fees pay the
following expenses: the issuer, dealer, remarketing agent, trustee, rating agency, and
respective counsel.
Updated 5/06 160 Federal Street, Boston, MA 02110 800.445.8030 www.massdevelopment.com

2. Fees (continued)
Borrowers pay for letter of credit bank and borrower counsel.
Borrowers pay a tax-exempt variable interest rate on outstanding principal. As of
March 1, 2006, the thirty-day tax-exempt commercial paper rate was 3.2% and since
1999, the thirty-day tax-exempt commercial paper rate has averaged 2.32%.
Process
A completed application with supporting documentation is submitted to
MassDevelopment. Upon borrower and MassDevelopment Board approvals and the
letter of credit bank’s credit approval, the borrower can close its first loan.
Borrowers should allow no fewer than 60 days between the time they submit an
application and the date on which they wish to close their first loan. Subsequent
loans require only 45 days advance notice.
What’s More...
MassDevelopment is committed to helping your business grow by providing financing
solutions that fit your needs. In addition to Capital Financing 501, we offer direct loans
and other tax-exempt bond financing options. Please call us at 800.445.8030, or visit
www.massdevelopment.com for more information on any of our programs.
Updated 5/06 160 Federal Street, Boston, MA 02110 800.445.8030 www.massdevelopment.com