Thu 07/21/2022 14:03 PM
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Relevant Documents:
June 29, 2017 Letter to N.J. Treasurer
GRB Official Statement

Grant revenue funds that provide debt service to holders of $287 million of Series 2017 grant revenue bonds, or GRBs, borrowed by the American Dream Mall in East Rutherford, N.J., “have not yet been remitted,” said Danielle Curry, press secretary for the Office of the State Treasurer, New Jersey Department of Treasury, yesterday, Wednesday, July 20, in an email correspondence with Reorg.

A semiannual $9.28 million interest payment on the GRBs is due Aug. 1, but a draw on debt service reserves for the Feb. 1 coupon left only $820.23 remaining in the account. A payment default for a missed debt service payment does not constitute an event of default under the bond documents, as reported.

Grant revenue originates with the Department of Treasury, Taxation Division. The New Jersey Sports and Exposition Authority, or NJSEA, purchased Ameream LLC’s rights to the grant revenue in June 2017, just a few days before the American Dream Project borrowed the GRBs. In a letter dated June 29, 2017, the NJSEA instructed the New Jersey Treasurer to deposit the grant revenue with bond trustee U.S. Bank.

The grant revenue remittance process is contingent on the New Jersey Economic Development Authority’s, or NJEDA’s, approval of a project cost statement. The NJEDA then submits the statement to the Taxation Division for review. The deadline to submit the project cost statement was March 1, as reported, with grant revenue payable no later than June 30, according to the GRB official statement. While the project cost statement was submitted to the NJEDA earlier this year, the statement is still under review, said market sources.

The GRBs most recently traded on June 30, when $9.1 million of a $150 million 6.75% Series 2017B taxable tranche due 2031 priced at 82.5 to yield 9.7%, down from the previous trade of 111 to yield 5.26% on Sept. 30, 2021, according to EMMA.

--Seth Brumby
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