BoA's NYC HQ to Get 'Liberty' Funding

The New York City Industrial Development Agency has made available Liberty Bond funding of $650 million to finance the development of a Midtown office property that will serve as Bank of America's New York headquarters, according to Morrison & Foerster, a New York law firm.The firm, which represented BoA in the transaction, said this is the first issuance of the tax-exempt Liberty Bonds for a project outside Lower Manhattan's Ground Zero area. The $1.2 billion, 945-foot tower is being developed by BoA along with the Durst Organization, and is expected to be completed in 2007, the law firm said. Future financings of up to $250 million (which are not tax-exempt) secured by the same property will be permitted under the terms of the financing, according to Morrison & Foerster. The bonds were also enhanced by an "accreting" letter of credit. "It will be interesting to see if the novel features of this financing will trickle into other bond deals, in particular on the residential side," said Mark Edelstein, chair of the law firm's real estate practice.