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CHAPTER 144
MUNICIPAL BOND BANK AUTHORITY
15 AAC 144.010
SCOPE OF REGULATIONS.
This chapter applies to all applications by a municipality for a loan from the Alaska Municipal
Bond Bank Authority through the purchase by the authority of municipal bonds of the
municipality under AS 44.85.
History -
Eff. 4/1/76, Register 58; am 10/19/94, Register 132
Authority -
AS 44.85.080
AS 44.85.095
15 AAC 144.020
ELIGIBILITY.
(a) The authority will, in its discretion, approve a loan to a municipality only if the loan
meets the following criteria:
(1) the authority determines the municipality to be creditworthy after evaluating the
municipality's loan application and any other information the authority considers relevant; and
(2) the authority determines, on the basis of the completed application and other information,
that the municipality would have to pay unnecessarily high borrowing costs in an offering of its
municipal bonds to investors because of one or more of the following factors:
(A) the municipality has not issued municipal bonds or the municipality has little outstanding
debt;
(B) investors are unfamiliar with the municipality because it has been newly incorporated or
has experienced recent rapid growth;
(C) the distance of the state from capital markets makes the municipality's bonds less
attractive than bonds of a comparable municipality elsewhere in the United States; or
(D) investors consider the municipality's bonds to have an element of risk because of
apprehension of possible temporary economic dislocation due to the loss or prospective loss of a
major employer in the municipality.
(b) The authority will, in its discretion, approve a loan not eligible under (a) of this section if
the authority determines that the loan will improve the marketability of authority bonds issued to
make loans under (a) of this section.
History -
Eff. 4/1/76, Register 58; am 10/19/94, Register 132
Authority -
AS 44.85.005
AS 44.85.080
AS 44.85.095
15 AAC 144.030
PREFERRED PURPOSES.
The authority will consider the following capital improvements, listed in order of preference, as
preferred purposes for loans to municipalities:
(1) school facilities;
(2) waste water treatment facilities;
(3) fire protection and public safety facilities;
(4) deleted;
(5) public health facilities;
(6) public transportation facilities;
(7) other capital improvements.
History -
Eff. 4/1/76, Register 58; am 10/19/94, Register 132
Authority -
AS 44.85.080
AS 44.85.095
AS 44.85.180
Editor's Notes -
Effective Register 132, January 1994, the regulations attorney consolidated 15 AAC 144.030
(4) in 15 AAC 144.030 (3) to conform to AS 44.85.180(d). 15 AAC 144.030 (4) was deleted to
reflect that change.
15 AAC 144.040
APPLICATION.
Each application by a municipality for a loan from the authority shall be in a form approved by
the authority, and must include:
(1) evidence of the municipality's eligibility under 15 AAC 144.020;
(2) a complete description of the purposes of the loan;
(3) unless waived by the authority based upon a finding that a substantially reliable financial
statement has been prepared, a financial statement certified by an independent certified public
accountant for the last fiscal year of the municipality;
(4) identification of the amount and sources of all financing required to complete the project;
(5) any additional information or documentation requested by the executive director to
determine the municipality's eligibility under this chapter or AS 44.85.
History -
Eff. 4/1/76, Register 58; am 10/19/94, Register 132
Authority -
AS 44.85.080
AS 44.85.095
15 AAC 144.050
ACCEPTANCE OF COMPLETED APPLICATIONS.
When the information required by 15 AAC 144.040 is received by the executive director, the
application is completed. The completed application will be evaluated by the executive director
to determine whether the eligibility criteria set out in 15 AAC 144.020 have been met.
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History -
Eff. 4/1/76, Register 58; am 10/19/94, Register 132
Authority -
AS 44.85.080
AS 44.85.095
15 AAC 144.060
BOARD REVIEW.
(a) The completed application along with the recommendation of the executive director and
any other relevant information shall be transmitted to the board of directors for its review.
(b) The board will, in its discretion, request that the executive director obtain additional
information and postpone immediate action on the application.
(c) The authority will approve a loan application for a project whose completion requires
financing in addition to the loan from the authority, only upon the condition that before the
authority issues bonds or disburses funds for the loan, the municipality demonstrates to the
authority's satisfaction that all financing required to complete the project has been committed.
(d) The authority may not approve a loan application from a municipality with an obligation
in default unless
(1) the municipality has undertaken to cure the default in a manner approved by all parties to
the obligation; and
(2) the authority finds that approval of the loan application will not have an adverse effect on
the authority's credit rating.
(e) If the board approves an application, the board will instruct the executive director to enter
into a loan agreement to purchase the municipal bonds of the municipality at the time or times
the authority is able to sell its own bonds in amounts, at rates of interest, and on other terms and
conditions that would enable the authority to purchase the municipal bonds. The loan agreement
must require, as a condition of closing the loan, evidence satisfactory to the authority that the
municipality has authorized the borrowing.
History -
Eff. 4/1/76, Register 58; am 10/19/94, Register 132
Authority -
AS 44.85.080
AS 44.85.095
15 AAC 144.070
EFFECT OF LETTER OF COMMITMENT
Repealed or Renumbered
Repealed.
History -
Eff. 4/1/76, Register 58; repealed 10/19/94, Register 132
15AAC 144.075
METHOD OF BOND SALE.
The board of directors of the authority shall determine the method of sale for each bond issue. In
its report on each loan application, the authority's financial advisor shall recommend, based on
the factors set out in (1) (7) of this section, the method by which the authority should sell bonds
to finance the loan. The authority will sell bonds at competitive sale unless the board determines
that a negotiated sale is in the interest of the authority and the borrowing municipalities. In
determining the method of sale, the board shall consider the following factors:
(1) size of the authority's bond issue;
(2) schedule for issuance of the authority's bonds;
(3) market conditions, including interest rate volatility;
(4) market familiarity with bond structure;
(5) whether the issue is a new money or a refunding issue;
(6) expected credit rating of the issue; and
(7) preference of a borrowing municipality for a particular method of sale, and the
municipality's reasons for that preference, as stated in its loan application.
History -
Eff. 10/19/94, Register 132
Authority -
AS 44.85.080
AS 44.85.095
AS 44.85.200
15 AAC 144.080
CONDITIONS.
(a) A municipality that submits a loan application shall make its books and records available
for inspection by the authority or its agents upon the receipt of a reasonable request to inspect
them.
(b) The authority will, in its discretion, request that the municipality pay in advance for the
direct cost of evaluating its application and no application will be considered until the requested
payment has been made.
(c) The authority will, in its discretion, require that the applicant agree that in the event of a
postponement of the date of purchase of municipal bonds, the applicant will hold the authority
harmless from any liability arising out of reliance by the applicant or any third party upon
approval of the loan application.
(d) The authority will, in its discretion, require that the loan agreement to be entered into
provide terms, conditions and limitations with respect to the amount of bonds that the
municipality may issue after execution of the agreement, the pledging of municipal revenues to
the municipal bonds purchased by the authority, and otherwise as in the opinion of the authority
are proper for the purposes and security of the authority and the holders of its bonds and notes.
History -
Eff. 4/1/76, Register 58; am 10/19/94, Register 132
Authority -
AS 44.85.080
AS 44.85.095
AS 44.85.170
15 AAC 144.090
DEFINITIONS.
In this chapter
(1) "authority" means the Alaska Municipal Bond Bank Authority created by AS 44.85;
(2) "executive director" means the executive secretary for the authority appointed under
AS 44.85.070;
(3) "creditworthy" means that, in the opinion of the authority, the current financial position
of a municipality is such that the municipality will be able to service its authorized and
outstanding municipal bonds without expectation of subsidy from state money not currently
available under state law and without imposing financial burdens upon its residents that would
create the expectation that its ability to service its municipal bonds in the future will be impaired,
and that there is no other reason to expect that in the future the municipality will not be able to
meet its debt service obligations as they become due;
(4) "municipal bond" means municipal bond as that term is defined in AS 44.85.410;
(5) "facilities" means capital improvements, including both real and personal property.
History -
Eff. 4/1/76, Register 58; am 10/19/94, Register 132
Authority -
AS 44.85.010
AS 44.85.080
AS 44.85.095
AS 44.8 5.410
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