New York City Bond Collateral Assistance Fund

HELPING MWBEs GET TO THE NEXT LEVEL!

New York City Bond Collateral Assistance Fund -Presenter

Liz Duncan-Gilmour

Senior Vice President & General Counsel

The Cayemitte Group

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The Cayemitte Group & Our Role

NYC Bond Fund Role - Program Manager & Fund Administrator

TCG core focus: serving small, MWBE and SDVOB businesses

Insurance & Bonding - clients include start-ups to NY/NJ Port Authority and NJ Transit

Current Capacity Building Education Programs- DASNY, City of Newark, NJ EDA, NYS DOT and the World Bank

Capital Management – facilitates access to capital and incentivizes bond underwriters and lenders be cause it mitigates their risk

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The NYC Bond Surety Fund Partners

Surety (Bonding) Representatives:

▪ Boston Indemnity Group (HIIG Surety) - Drew Jennings, Regional Director

▪ Service Insurance - James Burger, President

▪ International Fidelity - Scott Zmigrodski, Assistant Underwriting Manager

▪ Evergreen National Indemnity Company - Kevin McCabe, President ICU

▪ Travelers - Ralph Pulver, Regional Underwriting Officer

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New York City Bond Collateral Assistance Fund

David Cayemitte, PresidentThe Cayemitte Group

Insurance Bonding Fund Management Capital Management Back Office Services

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The NYC Bond Collateral Assistance FundPurpose of the Fund

➢ Support MWBE firms doing business with NYC agencies

➢ Provide incentives to Surety partners by offsetting risk

➢ Assist MWBE firms to qualify for larger contracts/projects

➢ Develop MWBE firms to qualify as primes for NYC projects

➢ Assist various NYC agencies with meeting MWBE goals

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$10,000,000 Bond Fund NYC Bond Collateral Assistance Fund

When will you need support ?

If Bidding or contracting directly with one of the 39 city agencies and a Bid or Payment & Performance Bond is required

If Bidding or contracting with a Prime contractor who is working with one of the39 city agencies and the Prime requires a surety bond

And

You require support to “qualify” for bonding (Payment & Performance Bond)

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$10,000,000 Bond Fund

Fund will provide up to $500,000 support per project

TCG and surety partners will underwrite each opportunity with the aim of providing support

If supported, TCG will issue an Irrevocable Letter of Credit (ILOC) on behalf of the contractor to help them to qualify for the bond

TCG will provide technical assistance where necessary for the project

TCG will coordinate and manage the issuance of the ILOC and the bond and manage closeout.

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The NYC Bond Collateral Assistance FundApply one of

Web-Based secure Portal - nycbondfund.bondingportal.com OR

Through your agent or broker who will contact our surety partners, who will then contact TCG

• You MUST complete the on-line application

• The underwriters may ask for additional information such as:

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• Financial Statements• WIP Schedule• Personal Financial Statement• Tax Returns

• Accounts Rec and Accounts Pay aging schedules• Job Cost Estimate or Bid Submission• Scope of work• Proof of cash or working capital

The NYC Bond Collateral Assistance Fund

If you are approved for collateral assistance:

• TCG will coordinate the issuance of the ILOC and the Bond

• The ILOC will be issued on behalf of your firm via Signature Bank

• The contractor will be responsible for all ILOC fees assessed by Signature Bank

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New York City Bond

Collateral Assistance Fund

HELPING MWBEs GET TO THE NEXT LEVEL!

Case Study:

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Stacie Alexiou, CEMCEO, Managing Director at WATT + FLUX an LED inspire Company

WBE NYS NYC PANYNJ MTA American Entrepreneur Award 2016

Board of Directors Women Builders CouncilState University of New York Maritime College

Greater New York City Area

Opportunity with the DOT

DOT contracted The Prime

The Prime had to meet MWBE goals

The Prime subcontracted with WBE LED Inspire

Contract Amount $2,103,624

The Prime required a bond for the contract

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The Opportunity – DOT and Client/Prime

Contract Scope of Services:

Upgrade of All Lighting to LED at

the Whitehall Ferry Terminal

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Agency – DOT – The Client/PrimeThe Team is Experienced and Ready to Deliver

To Proceed - LED Inspire required a

Bond In The Amount of

$2,103,624

LED Inspire Did Not Qualify for A $2,103,624 Bond

Why:

▪ LED’s largest completed contract was roughly $385,000

▪ The contract size was much larger than the company’s largest completed contract (the company was qualified for a $650k to $700k bond)

▪ The company’s financials did not support a $2mil+ contract

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The NYC Bond Fund helped LED to QualifyUnderwriting and Approval Process:

• TCG Worked with prime to break the $2.1mil contract into two smaller contracts: $1,048,781 & $1,054,843

• TCG worked with the surety underwriter and applied various risk mitigation tools to minimize surety exposure including collateral access from the fund and capital management.

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LED Inspire Bond Qualification - Whitehall

$0

$300,000

$600,000

$900,000

$1,200,000

Initial Contract

$708,000 to

SURETY

NYC Bond Fund

$300,000

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$1.08mil

8/2017 to 11/2017

▪ Use of Collateral (NYC Bond Fund) was the critical piece to getting the bond approved

▪ LED qualified for a $700k contract, not $1mil contract

▪ Underwriting partner willing to provide terms to facilitate bond approval

▪ TCG used risk mitigation tools to offset the bond risk

$300,000 collateral offsets 30% of the bond risk

Bond exposure reduced to an amount the company qualified for

LED Inspire Bond Qualification

$0

$300,000

$600,000

$900,000

$1,200,000

Phase 2 Phase 2

ILOC Support Estimated Bond Exposure

$705,000 ?? BIG SURETY

NYC Bond Fund

$300,000? ILOC

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$1.05mil

Phase 2

Bonded with $500,000 Collateral Support from the

Fundand

Capital Management

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Surety exposure

▪ The Fund assisted LED to obtain and complete a $1.0mil bonded contract

▪ The Fund then assisted LED for the second $1.0mil bond

▪ The firm has recognized a 400% growth in project size capacity

▪ LED can now potentially qualify for a $3.6mil project

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Helping MWBEs Get To The Next Level

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