- Re-engineer Outstanding Loans. By altering the documentation to add an additional rate mode, not a reissuance, the School could elect a new variable rate (SOFR) and then enter into an interest rate swap to fix the rate through the end of the Bank commitment term.
- Education. SouthState helped educate the School on the risks being assumed through a synthetically solution. Since Latin had done extensive research to establish its ‘core debt’ through its prior borrowing and capital campaign, the financial objective here was simply to generate savings.
- Execution. Working closely with Latin and its advisor, SouthState coordinated the rate mode addition and the swap to happen on the same day; this minimized risk and led to the School locking in a swap rate that was historically favorable.
- Savings. Ultimately, the solution provided by SouthState will generate approximately $300k in annual savings to Latin over the next 12 years.
Charlotte Latin Schools, Inc. Case Study
Delivering Significant Savings
SouthState designed a financing solution for Latin that leveraged its product offerings, on behalf of the School, to empower an exciting opportunity.
By tracking its customer’s outstanding debt profile closely against diverging market movements, SouthState was able to propose an alternative rate mode strategy – synthetically fixed (swap) – to generate significant savings for Charlotte Latin School.