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Recovery Zone Facility Bonds

Created by the American Recovery and Reinvestment Act of 2009, these bonds provide any business in the State making capital expenditures with access to tax-exempt bond financing. They are ideally suited to borrowers that can arrange their own credit enhancement.

Eligibility

Any borrower proposing to use bond proceeds for capital expenditures for an active trade or business other than rental or residential real estate, a golf course, health club, country club, massage parlor, hot tub facility, racetrack or other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off-premises. No refinancing of existing debt is allowed; however expenditures towards the capital purchases may be reimbursed if incurred after a Recovery Zone designation has been made.

Bonds must be issued on or before December 31, 2010.

Bond Issuer

FAME

Loan Amount/Exposure

Determined by the provider of credit enhancement and the availability of the allocation of the tax exempt authority.

Interest

Tax-exempt rates determined by the market at the time of bond sale (for public issuance) or by credit enhancement provider (for private placements).

Loan Term

Structured with provider of credit enhancement.

Security

Determined by provider of credit enhancement. May include assets being financed and/or a reserve.

Fees

Application Fee:

$5,000
Application Fee is due with the application and is nonrefundable.

Issuance Fee:

0.3% of the amount issued
The minimum issuance fee is $10,000.

Process

The issuance of Recovery Zone Facility Bonds requires a multi-step procedure, including publication of required notices, a public hearing and the approval of a bond resolution by the FAME Board of Directors at a public meeting. Borrowers should anticipate that it will take 90 days from receipt of a complete application at FAME to the date of bond issuance and plan accordingly. For a full description of the process for bond issuance click here.