Baton Rouge Student Housing defaults on 2003A and 2003B revenue bonds

By Sheri Kasprzak

New York, March 10 - Baton Rouge Student Housing, LLC allegedly defaulted Monday on $26 million in series 2003A and 2003B Louisiana Local Government Environmental Facilities and Community Development Authority revenue bonds.

"The borrower's failure to maintain a fixed charges coverage ratio of at least 1.00 is an event of default," said a notice of default released Monday.

"Further, section 1001 of the indenture provides that a default in the performance, or breach, of the covenant or agreement contained in the agreement and continuance of such default or breach of a period of 30 days after a written notice of has been given specifying such default or breach and requiring it to be remedied, constitutes an event of default under the indenture."

Also, the Bank of New York, the trustee on the bonds, transferred $390,876 from the debt service reserve fund to pay principal and interest on the bonds due Sept. 1, 2006 and in August 2007, transferred $466,838 from the fund to pay principal and interest due Sept. 1, 2007. The borrower was required to pay the trustee the amounts deposited into the debt service reserve fund. To date, the issuer has not made any payments to the trustee.

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