SouthState leveraged its product offerings to design a financing solution for Latin that enabled this exciting opportunity:
- 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.
