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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Cap
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Man
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Sup
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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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