Master Loan Program
The Master Loan Program was introduced in 1994 and enables qualified borrowers to access the tax exempt capital markets at investment grade interest rates. Documents are standardized and bonds can be marketed for more than one borrower at a time, reducing the costs of issuance for each.
Program Structure
- Loan size $4,000,000 to $25,000,000
- Above $25,000,000 on case-by-case basis
- Term of loans up to 20 years
- 20 years preferred, above 20 years on case-by-case basis
- Loans tailored to meet the Borrower's current and future capital financing needs
- Must show ability to repay
- Bonds marketed for a single borrower or a group of borrowers with each borrower responsible only for its own series of bonds
- Credit support provided by the Montana Board of Investments results in a lower interest rate to the borrower
- Capitalized interest funding is available during the construction period
- Generally debt service coverage of 1.35% required
Cost Benefits
- Investment grade bond interest rates have historically provided a lower cost of capita
- Issuance costs are shared by all borrowers and are therefore kept to a minimum
- Construction escrow accounts can be created eliminating the need and cost for interim construction financing
- Standardized documents used whenever applicable to reduce documents drafting costs
Performance Record
|
Average interest rate: |
|
| 1994 | 5.3% |
| 1995 | 5.5% |
| 1996 | 5.2% |
| 1998 | 5.9% |
| 2000 | 5.9% |
| 2001 | 5.0% |
| 2002 | 5.0% |
| 2005 | 4.7% |
| 2006 | 4.4% |
| 2007 | 5.3% |
| 2008 | 5.0% |
Loan Process
- If the Master Loan Program is an attractive financing vehicle for your particular project, please notify the Authority of your interest. Staff will provide additional information or clarification on the process.
