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 ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATION GUIDELINES
FOR ISSUANCE (February 28, 2005) Credit Criteria A. Financings rated in the “A” category, without respect to rating modifier, by a nationally recognized rating agency, may be issued with or without credit enhancement using appropriate disclosure information but without restriction as to qualification of investors or denomination of the securities. B. Financings rated in the “BBB” category, without respect to rating modifier, by a nationally recognized rating agency, may be issued without credit enhancement using appropriate disclosure information in minimum denominations of $100,000. C. Financings rated below the “BBB” category or that are not rated may be issued through private placement to a single “Qualified Institutional Buyer” as defined under Rule 144A of the Securities Act of 1933 with strict conditions on resale as determined by the Authority. The Authority may, from time to time, adopt separate policy limiting the issuance of below investment grade and non-rated financing. General A. The Authority meets to consider requests for financing as such arise throughout the year. Applicants should submit all necessary information and application materials requested by Authority staff at least fifteen days prior to the date desired for consideration.B. All applications must demonstrate sufficient public benefit as determined by the Authority. Among the factors the Authority may consider in making this determination are affordability of services or rental rates, availability of services or rental units, and level of services or rental units provided at below market rates. C. From time to time the Authority publishes separate application requirements for financings in various categories; however, Authority staff may require supplemental information and material before a request is submitted for consideration by the Authority. D. Authority staff will meet at least once with the Applicant and, at the expense of the Applicant, visit the Applicant's facilities and/or project site. E. Cities and counties throughout the State of California are eligible for membership in the Authority subject to the approval of the Authority Board. All projects must be within the jurisdiction of an Authority member and all financings will be discussed with the Authority member in whose jurisdiction the project is located. F. All financings shall be subject to public hearing and approval, either as required by Section 147(f) of the Internal Revenue Code of 1986, as amended, including approval by the host jurisdiction (TEFRA Hearing and Approval) or if the TEFRA process is not applicable to the financing, the Authority member in whose jurisdiction the project is located must adopt a resolution approving the project prior to final consideration of the financing by the Authority. G. All applicants will be required to provide comprehensive indemnification to the Authority, its members, officers, agents and employees, in form acceptable to the Authority and its Legal Counsel. H. The Authority requires as a condition of issuance for each publicly offered financing that a comprehensive legal opinion ("10(b)-5") with respect to the sufficiency of the disclosure in each official statement, be addressed and delivered to the Authority by a nationally recognized securities law firm. I. The Authority requires that any customary supplemental opinion of Bond Counsel addressed and delivered to an Underwriter also be addressed and delivered to the Authority. J. The official statement or other disclosure document for each financing shall include language having the same effect as: “The Authority has supplied information in the official statement (or other offering documentation) under the caption “the Authority” and under the caption, if applicable, “Absence of Material Litigation – The Authority”, but is not responsible for any other information contained in this Official Statement (or any other offering documentation). K. Investors shall receive physical delivery of all securities issued by the Authority without an investment grade rating pursuant to the Credit Criteria section above. The Authority also reserves the right to require physical delivery of securities (which precludes using the services of DTC) issued with ratings below the “A” category. Authority Policy
B. All projects to be financed by the Authority must receive 3/4 approval by the members of the Executive Committee or Board of Directors in attendance, as the case may be. C. The Authority reserves the right to require Applicants to provide evidence of insurance in forms and amounts as determined by the Authority or its Legal Counsel. D. The Authority reserves the right to engage, at the Applicant’s expense, the services of an independent construction monitor, appraiser, feasibility consultant or other professional. E. The selection of financing team members is primarily the responsibility of each Applicant; however, the Authority reserves the right to select alternate or additional members of the financing team at the Applicant’s expense including bond trustee, bond counsel, disclosure counsel, senior or co-managing underwriters, financial advisor or consultant, supplemental securities, tax, or disclosure counsel to the Authority, or other professional services as the Authority may deem necessary. In some cases Authority staff may require that a proposal be reviewed and evaluated by one or more of such professional services firms to assist the Authority in determining the appropriateness of the proposed transaction for the Authority, the security of the proposed transaction, the integrity of the proposed financing structure, the form and substance of legal documents, and other factors before the proposal is submitted for consideration by the Authority’s Board of Directors. All fees and expenses of such firms will be paid by the Applicant whether or not the Authority elects to act as issuer or the financing is completed. F. The Authority strongly encourages the participation of Minority-, Women-, and Disabled American Veteran-Owned Businesses in its financings. G. The Authority retains the right to entertain exemptions or waivers to those portions of these Guidelines not required by law. Authority Fees Administrative Fees:Financings which are Credit Enhanced and Rated: 5/100 of 1% (.0005) of par payable at closing, plus 2/100 of 1% (.0002) of original principal amount payable per annum. Financings which are Rated but not Credit Enhanced: 10/100 of 1% (.001) of par payable at closing, plus 2/100 of 1% (.0002) of original principal amount payable per annum. Financings which are neither Credit Enhanced nor Rated: 15/100 of 1% (.0015) of par payable at closing, plus 5/100 of 1% (.005) of original principal amount payable per annum. The minimum Administrative Fee at closing for Private Activity Bonds issued for Multifamily Housing is $10,000. The minimum Administrative Fee at closing for all other financings is $5,000. The maximum Administrative Fee at closing for all financings is $25,000. The maximum annual Administrative Fee for all financings is $10,000. Monitoring Fees: Private Activity Multifamily Housing Bonds are subject to separate additional fees for project monitoring if performed by the Authority equal to the lesser of either: 1/8th of 1% of the original principal amount of the financing, or $4,000, per annum, for each project financed. Other Fees and Costs: The fees of Authority Counsel and any other out-of-pocket costs incurred by the Authority are payable by the Applicant separately at closing. Any additional fees and expenses pursuant to Authority Policy E above are payable by the Applicant separately at closing or ongoing as appropriate. All fees quoted above are guidelines only, are subject to change, and may vary on a case-by-case basis. In addition, the Authority may charge additional administrative fees in extraordinary circumstances subsequent to closing upon the occurrence thereof. For Questions or Application Materials please contact the Public Finance Director, Association of Bay Area Governments, 101 Eighth Street, Oakland, CA 94607, Tel: (510) 464-7932, Fax: (510) 464-8468, Email: bonds@abag.ca.gov |