3.6.2 Installment Sale Agreements

3.6.2 Installment Sale Agreements

Installment sale agreement financings are based on a public agency’s legal authority to purchase property, including property used by its enterprises and to appropriate annual funds to meet this obligation. To create a security marketable to investors, the public agency must employ a COP structure or a JPA bond structure, which are each more complex than a revenue bond structure. Installment sale agreements are the preferred financing vehicle for enterprise revenue debt when the issuance of revenue bonds requires voter approval.

PRINCIPAL USES – The principal uses of installment sale agreements are essentially the same as described above in Section 3.3.6.1, Public Enterprise Revenue Bonds. 

PRINCIPAL USERS – The principal users of installment sale agreements are public agencies that may not issue enterprise revenue bonds without voter approval.

LEGAL AUTHORITY – Virtually every public agency has the authority to purchase property, and voter approval is rarely required.

STRUCTURE AND DOCUMENTATION – Unless the debt is placed with a single lender, public agencies use either a COP structure or a JPA bond structure. Structure and documentation considerations are otherwise the same as described above in Section 3.3.6, Enterprise Fund Debt Obligations.