Citigroup-led $560m bond purchase backs Mount Sinai renovations

Citigroup Global Markets has led a consortium of financial institutions in the $558.6m purchase of Series 2015 Bonds issued by the Dormitory Authority of The State of New York (DASNY) for renovations and upgrades to Manhattan’s Icahn School of Medicine at Mount Sinai.

Citigroup Global Markets has led a consortium of financial institutions in the $558.6m purchase of Series 2015 Bonds issued by the Dormitory Authority of The State of New York (DASNY) for renovations and upgrades to Manhattan’s Icahn School of Medicine at Mount Sinai.

The purchase price includes the $512.4m issuance from the state entity, a roughly $48.4m premium and a $2.3 underwriter’s discount.

Annenberg Building towering above the Mount Sinai campus
Annenberg Building towering above the Mount Sinai campus

About $51.6m of the principal amount of the 30-year, fixed-rate, tax-exempt and taxable bonds was made available immediately as a mortgage payment to refinance and upgrade about 57,200 sq ft of research laboratories, support services, infrastructure, conference rooms and other interior space in the 26-story Annenberg Building at 1180-88 Fifth Avenue, in addition to 8,000 sq ft of faculty and staff office space at the Icahn Medical Institute Building at 1425 Madison Avenue.

The bonds also refund all or a portion of $485.1m in Series 2007 and Series 2009 Bonds previously issued by DASNY to Icahn, taking advantage of lower interest rates and resulting in $65.6m in gross savings, according to DASNY documents seen by Real Estate Capital.  

The Icahn School of Medicine at Mount Sinai, chartered by the New York State Board of Regents in 1968 is a teaching and research facility complementing the Mount Sinai Hospital. The school and hospital compose one of the major healthcare facilities in New York City. The school grants both M.D. and Ph.D. degrees.

The group of financial institutions serving as underwriters and counsel on the deal, in addition to Citigroup, include Goldman Sachs, Academy Securities, BofA Merrill Lynch, Fidelity Capital Markets, J.P. Morgan, Morgan Stanley, Ramirez & Co., Rice Financial Products Company, Stifel and TD Securities.

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