Section 3.102.120. Interest rates.

	(a)  The initial rate of interest on the authority's loan made under this chapter is set at the time the authority issues a loan commitment at a rate equal to the sum of the "true interest cost rate" and the "authority cost amount." If the authority issues bonds in respect of a loan, the authority will set the interim rate of interest, pending sale of the bonds, at the time that the authority issues a loan commitment. The authority will set the final rate of interest after issuance of the bonds. If the authority does not issue bonds in respect of a loan, the authority will set the rate of interest at the time that the authority issues a loan commitment.  
	(b)  In this section,  
		(1) "true interest cost rate" means  
			(A) if the authority issues bonds to fund an NMTC leverage loan, the rate on the bonds of the authority; or  
			(B) if the authority uses authority assets to fund an NMTC leverage loan, 65 percent of the rate identified on the daily Federal Home Loan Bank of Seattle's Fixed-Rate Advances Index which most closely matches the term of the loan, and whether the type of loan has a fixed or variable interest rate, as determined by the authority, with the following adjustments:  
				(i) for a fixed rate loan, the rate during any fiscal year may not be lower than the five-year return on the investment funds of the authority, expressed as an annual interest rate, as determined in the authority's review of its investments at the end of the third quarter of the prior fiscal year and, for a variable rate loan, the rate during any fiscal year will not be lower than 475 basis points;  
				(ii) for a variable rate loan, 200 basis points will be added to the rate;  
		(2) "authority cost amount" means an amount, determined by the authority and expressed as an annual rate of interest, that is necessary to pay for the allocable expenses of operation, costs of issuance not subject to reimbursement by a borrower, and loan servicing with respect to loans for which interest rates are determined under this section; however, if tax exempt bonds are issued the annual rate of interest may not exceed the maximum amount above the yield on the tax-exempt bonds that would be permitted under 26 U.S.C. 148 (section 148 of the Internal Revenue Code of 1986), as amended, without causing the bonds to lose their tax-exempt status.  

Authorities

44.88.085;44.88.770

Notes

Authority

AS 44.88.085 AS 44.88.770 Editor's note: Even though 3 AAC 102.120 was adopted and effective 3/29/2013, it was not published until Register 207, October 2013.

History

Eff. 3/29/2013, Register 207

References

3.102.120