Relevant Document:
Approval of Project Cost Statement (EMMA Notice)
U.S. Bank, trustee for holders of $287 million Series 2017A and taxable Series 2017B limited obligation grant revenue bonds issued on behalf of the American Dream project, disclosed today that on Wednesday, Dec. 13, American Dream developer Ameream LLC informed counsel for the trustee that the New Jersey Economic Development Authority, or NJEDA, has certified that the developer has met all of the requirements of the project cost statement, according to an EMMA notice.
The NJEDA’s approval of the project cost statement is necessary for the distribution of grant revenue to bondholders, which is the source of debt service on the bonds. The approval is now required to be transmitted to the director of the Division of Taxation in the New Jersey Department of the Treasury, who will calculate the grant revenue amount. Grant revenue cannot exceed a maximum aggregate amount of $390 million.
The lack of approval for the project cost statement resulted in draws on a reserve account on
Aug. 1, 2021, and again on
Feb. 1, 2022, to make debt service payments. Once the reserve account was exhausted, debt service payments due
Aug. 1, 2022, and
Feb. 1, 2023, were delinquent. However, the delinquent payments did not constitute an event of default.
The notice states that the trustee cannot provide any assurances of when the grant revenue amount will be determined and makes clear that prior to any distribution to bondholders, the trustee will use the funds “for payment of fees and costs incurred in performing its duties, as well as indemnities owing to the Trustee.”