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 “AA+” credit rating from both Standard & Poor’s Ratings Services and 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 $12.7 million in FY 2014, and $19.6 million in FY 2013. During FY 2014, the Bond Bank issued bonds totaling $178.5 million, resulting in $191.4 million in loans to communities for projects, a record year. This compares to FY 2013 with $153.5 million in bonds issued, resulting in $174.5 million in loans to communities for projects. Over the last 10 years, the Bond Bank has saved Alaskan communities approximately $112 million, and has secured over $1.5 billion dollars since inception 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.