Alaska Municipal Bond Bank
Project Planning and Issuing Bonds
The Bond Bank
• Created in ‘75 to assist Alaskan
municipalities access low cost funds for
capital projects
• Operation is Self Supporting and has
Repaid State’s Investment
• Efficiency and Flexibility has Increased
• Continually Generating and Implementing
Innovations to Better Meet the Mission
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Mission Statement
“To Provide Municipalities Finance Options for Capital
Projects They Can Afford”
Accomplished By
• Sell Highly Rated Bond Bank Bonds (Aa Moody’s & AA+
Fitch)
• Use Proceeds of Bond Bank bonds to Fund Lower Rated
Community Bonds at the Bond Bank Borrowing Rate
• Bond Bank Reduces Through Economies of Scale and
Pays Most Costs of Issuing Bonds
Result
• Over $1 Billion in Bonds Issued Resulting in $90.5 million
in Community Savings on 140 loans Since 2002
$712 Million of Bond Bank
Loans at 6/30/12
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
• At 6/30/12 Juneau’s Outstanding Loan
Amount was $91,240,000 or 10.65% of
Bond Bank Loans
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Benefits of Using the Bond Bank
Save Time and Money – Gain Experience
• Lower interest rates on bonds
• Reduce work burden of municipal employees
• Bond Bank pays certain costs of issuance and ongoing
costs of maintaining bonds
• The Bond Bank is a frequent issuer and is able to provide
general market, financial structure and legal issue updates
• Monitor market for refinancing savings
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Yield Curves as of September 14, 2007
Aaa, Aa, A and Baa Bonds (Municipal Market Data)
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
BBB
A
AA
AAA
The Bond Bank Financing Process
Revenue or GO Issues
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Community(s) Decide to Issue
Bonds
Bond Counsel Contracted
Apply to Use Bond Bank
Plan of Finance Determined
Documents Drafted (legal &
Marketing)
Communities take legal action
Bond Bank Board Considers Loan
Ratings Obtained
Finalize & Approve Documents
Price and Close Bonds
•
Week 1
•
Week 2
•
Week 3-7
•
Week 7-8
•
Week 8-9
•
Week 10-12
Who is Involved
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Financing Team Members
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•
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Municipal employees
Municipality’s Bond Counsel
Bond Bank Staff
Bond Bank Financial Advisor
Bond Bank Bond Counsel
Bond Bank’s Trustee/Paying Agent
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END NOTE
Questions regarding the Bond Bank and its
programs should be directed to:
Deven Mitchell
907.465.3750
[email protected]
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