MJH Education Assistance Illinois defaults on student housing revenue bonds

By Caroline Salls

Pittsburgh, May 29 - MJH Education Assistance Illinois IV LLC is in default on its Illinois Finance Authority student housing revenue bonds for failing to make the entire scheduled principal and interest payments due May 28, according to a notice to bondholders from trustee U.S. Bank NA.

According to the notice, the bond payments are funded through the Fullerton Village Project.

The trustee said MJH was not able to make the whole payments because project occupancy rates and revenues continue to be lower than expected.

As a result of the payment failure, U.S. Bank said payment of the $940,000 principal maturity due on June 1 on MJH's series 2004A bonds and the sinking fund payment of $260,000 due on the series 2004B bonds maturing on June 1, 2014 will not be made.

The June 1 interest payments due on the series 2004A bonds and the series 2004B bonds are being made in part from the series 2004A debt service reserve account and the series 2004B debt service reserve account. No payments are being made on the series 2004C bonds.

The trustee said $607,297 from the series 2004A debt service reserve account is being used to make the $1.47 million June 1 interest payment due to holders of those bonds, leaving $2.83 million remaining in the series 2004A debt service reserve account, against a $3.89 million debt service reserve requirement for the 2004A bonds.

In addition, U.S. Bank said $379,415 from the series 2004B debt service reserve account is being used to make the $380,509 June 1 interest payment, leaving $330,280.94 remaining in the series 2004B debt service reserve account, against a $1.02 million debt service reserve requirement.

The trustee said it is still evaluating its options in connection with the bond payment defaults.

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