L

large-scale pools

• Pooling of Debt Issues
• 3.7.7 Pool Bonds
  Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
• Figure 3-6 Marks-Roos Large Scale Pool

lease-supported debt

• Lessor/Lessee
• Financing Lease
• Direct Lease
• 3.2.3 Lease-Supported Debt
  Lease-supported debt represents a blend of direct debt and debt issued on behalf of another entity.
• Figure 3-2 Private Placement (Direct Lease/Loan)
• Figure 3-4 Lease-Supported Debt
• 3.7.2 Direct Leases (See “financing leases” and “lease revenue bonds”)
  The direct lease (or lease-purchase) structure is most often used to finance the acquisition of equipment such as fire trucks.

lease revenue bonds

• i.4.3 Steps Public Agencies Must Take to Use Debt Financing
• i.4.6 What Financing Options are Available
• 1.2.4 Exceptions to the Debt Limit
  California courts recognize several exceptions to the constitutional debt limit.
• 1.3.1 Lease Revenue Bonds and Certificates of Participation
  Debt obligation structured to comply with the Lease exception to the Constitutional debt limit.
• 3.1.4 Unique Public Agency Financings that Address Legal Constraints or Public Policy Issues
  California public finance professionals have structured some types of debt to address special legal constraints.
• 3.3.2.1 Lease Revenue Bonds and Certificates of Participation
• 3.6.1 Financing Leases
  The public agency obtains financing by entering into a lease for which it makes rental payments
• 3.6.4 Joint Powers Agency or Authority (JPA) Bonds and Other Issuances
  Due to the extensive bond issuance authority afforded JPAs under government code, JPAs are a common vehicle for issuing bonds that are backed by either a lease or installment sale agreement.
• 3.9.2 State Public Works Board Lease Revenue Bonds
  The California State Public Works Board issues lease revenue bonds to finance capital improvement for state agencies.

legal documents

• i.4.1.2 Issuance Phase
• i.4.4 Additional Legal Requirements – Internal Boards, Reporting to CDIAC, and Voter Approval
• 2.3 Structural Factors Addressing Risk and Investor Interests
  Ways the structure of a debt obligation may address risk and investor interests.
• 2.4 Other Common Document Provisions
  Structural features of debt obligations often contained in bond documents.
• 8.1.1 Bond Documents
  Bond documents that contain provisions that control the administration of bond funds.

• authorizing resolutions
  • Bond Resolution
  • Indenture/Bond Resolution (General, Supplemental, and Series)
  • i.4.4 Additional Legal Requirements – Internal Boards, Reporting to CDIAC, and Voter Approval
  • 2.3 Structural Factors Addressing Risk and Investor Interests
    Ways the structure of a debt obligation may address risk and investor interests.
  • 4.4.5 Reimbursement of Prior Expenditures
    Reimbursement of Prior Expenditures pursuant to the Tax Code.
  • A.6 General Bond Statutes
• bond purchase agreement
  • Bond Purchase Contract or Agreement
  • 5.3.3 Documentation for a Negotiated Public Offering
• continuing disclosure agreement
  • Continuing Disclosure Agreement
  • 8.4 Continuing Disclosure
    Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
  • 8.5 Other Disclosures to the Market
    Other forms by which issuers may communicate to market participants.
• covenants
  • Covenants
  • i.2.3 Decision #3 – Can the municipal market help the public agency meet its capital financing needs?
  • i.5.1.1 Debt Management Policies
  • i.5.2.1 Proposition 39 General Obligation Bonds
  • 2.4.5 Covenants
    Promises or agreements made by the borrower to lenders and other financial partners.
  • 8.1.1 Bond Documents
    Bond documents that contain provisions that control the administration of bond funds.
  • debt covenants
    • 2.4.5.1 Debt Covenants
  • general financial covenants
    • 2.4.5.2 General Financial Covenants
  • property covenants
    • 2.4.5.3 Property Covenants
  • rate covenant
    • 2.4.5.4 System Covenants
    • 3.3.6 Enterprise Fund Debt Obligations
      Debt obligations payable from and secured by revenues received from a local government “proprietary” enterprise.
    • 3.3.6.1 Public Enterprise Revenue Bonds
  • system covenants
    • 2.4.5.4 System Covenants
• indenture
  • Indenture/Bond Resolution (General, Supplemental, and Series)
  • i.4.1.2 Issuance Phase
  • 1.1.2 General Bond Statutes
    Statutory authorities broadly applicable to public agencies.
  • 2.3 Structural Factors Addressing Risk and Investor Interests
    Ways the structure of a debt obligation may address risk and investor interests.
  • 3.1.6 Types of Debt Instruments
    Basic categories of debt instruments: bonds, notes, direct leases, and certificates of participation
  • 6.2.2 Attorneys
  • 8.1.1 Bond Documents
    Bond documents that contain provisions that control the administration of bond funds.
  • 9.2 Types of Funds Available for Investment
  • A.6 General Bond Statutes
• loan agreement
  • Loan Agreement
  • i.4.1.2 Issuance Phase
  • 8.1.1 Bond Documents
    Bond documents that contain provisions that control the administration of bond funds.
• Official Statement (See “disclosure”)
  • Official Statement/Preliminary Official Statement
• permitted investments
  • Permitted Investments
  • 9.3.1 Statutory Authority
    Controlling statutory authority for investment of bond funds.
  • 9.3.2 Bond Document Provisions
    Role of bond documents in the investment of bond funds.
  • 9.4.1 Permitted Investments
    Types of investment vehicles that may be used to invest bond funds.
  • 9.5.2 Investment Considerations
    Issuer considerations regarding investment of bond funds.
• provisions
  • 2.4 Other Common Document Provisions
    Structural features of debt obligations often contained in bond documents.
  • additional debt
    • Additional Bonds
    • Additional Bonds Test/Additional Bonds Covenant
    • 2.4.6 Additional Debt
      Agreements between borrowers and lenders regarding additional debt obligations
  • amendments
    • 2.4.11 Amendments
      Procedures for amending bond documents and related debt security documents.
  • anti-fraud(See “anti-fraud”)
    • Anti-Fraud Provisions
  • application of proceeds
    • 2.4.1 Application of Proceeds
      How the proceeds of debt may be applied.
  • funds and accounts/flow of funds
    • Bond Fund
    • Debt Service Account(Bond Account Principal)
    • Flow of Funds
    • Governmental Funds
    • Reserve Account(Bond Reserve Account)
    • Special Fund
    • 2.4.3 Funds and Accounts; Flow of Funds
      How funds will flow from borrower to lender.
  • source of payment
    • Pledge
    • 2.4.2 Source of Payment; Pledge
      The pledge of revenues securing the debt obligation
• reimbursement resolutions (See “reimbursement of prior expenditures” and “resolution – inducement/reimbursement”)
  • Reimbursement Resolution
• tax certificate
  • Tax Certificate
  • Arbitrage Certificate
  • 4.11 Bank Qualified Bonds
    The ability for banks to benefit from tax-exempt bonds under the Tax Code.
  • 8.3 Post-Issuance Federal Tax Law Requirements
    Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax-exempt” status.
• trust agreement (See “legal documents – indenture” and “resolution- inducement/reimbursement”)
  • 2.3 Structural Factors Addressing Risk and Investor Interests (See “legal documents – indenture”)
    Ways the structure of a debt obligation may address risk and investor interests.

letters of credit

• Letter of Credit
• 2.3.2.3 Letters of Credit
  Liquidity Support: Letter of Credit
• Figure 2-1 Basic Cash Flow for a Variable-Rate Demand Obligation or “VRDO”

line of credit and standby purchase agreement

• Line of Credit
• Standby Purchase Agreement
• 2.3.2.4 Lines of Credit and Standby Bond Purchase Agreements
  Liquidity Support: Lines of Credit

liquidity support

• Liquidity Facility or Liquidity Support
• 2.3.2 Credit Enhancement and Liquidity Support
  Use of credit enhancements and liquidity guarantees to lower risk and attract investors.
• 6.3.4 Transactions with Credit or Liquidity Support
  The OS must include a description of the terms of that credit or liquidity support and disclosure regarding the credit or liquidity provider
• Figure 2-1 Basic Cash Flow for a Variable-Rate Demand Obligation or “VRDO” (See “credit facility”)

listed event

• Listed Event
• 8.4.2 Event Notices
  Event notices required by SEC Rule 15c2-12.
• 8.5.4 Managing Disclosure Risk (See “disclosure” and “material events”)
  Approaches to managing the risk improper disclosure.

local debt policies

• Debt Policy
• i.5.1.1 Debt Management Policies
• i.5.2.5 Reports to the California Debt and Investment Advisory Commission
• 7.1.1 Report of Proposed Debt Issuance

local revenue categories

• 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
  Sources of revenue available to local governments to repay debt obligations.
• Figure 1-1 Public Agency Revenue Sources by Category (See “California Constitution”)

London Interbank Offered Rate (LIBOR)

• London Interbank Offered Rate (LIBOR)
• 3.4.2.1 Index Debt
  The interest rate payable on a debt obligation is adjusted periodically in accordance a published index.