AMBBA is a public corporation established to aid Alaska municipalities in financing capital improvement projects such as schools, water and sewer systems, public buildings, harbors, and docks (AS 44.85.020 through 44.85.240)
(AK Admin Code ch. 144). AMBBA generates funding by selling bonds on the national market, and using the proceeds to purchase bonds from local governments. Administratively supported by Department of Revenue staff, a board of five directors determines the Bond Bank’s actions such as setting interest rates and approving loans.
The Bond Bank has an excellent loan record and has received an “Aa2” credit rating from Moody’s Investor Service and “AA+” from Fitch Ratings. With these ratings, it is able to borrow money at favorable interest rates, not only remaining self-sufficient, but actually contributing to Alaska’s General Fund annually.
The Bond Bank’s strong credit saved Alaskans an estimated $17.2 million in 2012, and $19.6 million in 2013, while issuing bonds totaling $149.4 million in 2012, and $153.5 million in 2013. Over the last 10 years, the Bond Bank has saved Alaskan communities approximately $100 million while securing over $1.1 billion dollars to finance the construction of key projects; including schools, roads, utilities, harbors, hospitals, and other municipal facilities.
Smaller communities are at a disadvantage in the financial markets. They may have lower bond ratings, and although credit worthy, have not issued bonds or notes, have little outstanding debt, or lack investor familiarity. The Bond Bank is able to borrow money at favorable interest rates to purchase the bonds of Alaskan municipalities. These municipalities then pay principal and interest to the Bond Bank on their debt.
Whether you are a new community to the bond bank, or you already have loans outstanding, we are here to help you analyze your current debt service structure, and see if there’s an opportunity to obtain new financing or perform a refunding of an outstanding series of bonds.