INDUSTRIAL DEVELOPMENT REVENUE BOND PROGRAM

The Industrial Development Revenue Bond Program reduces the interest costs of financing projects for companies through the issuance of both taxable and tax exempt bonds.  Additionally, ad valorem (except school taxes) and sales tax exemptions are granted in conjunction  with this type of public financing.  The bonds must be secured by an irrevocable, direct-pay letter of credit or other credit enhancement acceptable to MBFC.

The proceeds of a bond issue may be used for the acquisition and construction of real property, machinery and equipment, capitalized interest, reserve funds, and a limited amount o of the cost of issuance in accordance with provisions of the Internal Revenue Code.

Although there is no restriction on the amount of taxable debt which may be incurred, there is a $10 million cap on tax-exempt financing.  The maximum term of a bond issue will be equal to 120% of the average life of the fixed assets or thirty years, whichever is less.  The effective rate of a loan to a company will be determined by using a combination of the interest rate on the bonds, the cost of issuance, and any applicable fees.