Westhoff, Cone & Holmstedt

Simon Wiesenthal Center

Success Stories
Simon Wiesenthal Center

The Simon Wiesenthal Center in Los Angeles (the "Center") was a dream in the 1980's. However, since its opening in 1993, it has hosted 3.5 million visitors from around the world, focusing on the dynamics of racism and prejudice in America and the history of the holocaust.

Mr. Holmstedt first met representatives of the Center while with his predecessor firm, Bear Stearns. Center officials had been conducting fund raising in order to generate approximately $20 million to construct the Center. It was determined that use of a combination of tax-exempt debt and fund raising could accelerate the construction of the Center and increase the opportunity for the Center's success. Together with representatives of the Center, Mr. Holmstedt prepared a financial analysis of the contributions received, pledges made and income from operations in order to determine the appropriate amount of debt that could be financed. Ultimately, it was decided that the sale of approximately $14 million of tax-exempt bonds, combined with present funds raised and future pledges was feasible. The Center requested that the debt be prepayable at any time and that the annual cost of carry be kept to a minimum. As a result, a 7-day variable rate bond structure was recommended by Mr. Holmstedt as it would accomplish both goals. Variable rate bonds require a bank letter of credit to provide liquidity and a guaranty of payment to support the bonds. The Center had no previous banking relationships so Mr. Holmstedt conducted a solicitation of commercial banks in order to generate a commitment from a bank to produce the required letter of credit. This solicitation concluded that National Westminster Bank had the best proposal. Based upon the National Westminster Bank guarantee, the bonds received a "AA/A-1" rating and the Center was completed as planned. Although the bonds had an initial term of 20-years, through the Center's fund raising efforts the bonds have been retired early as planned.

| HOME | CONTACT US |