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(a) The authority will, in its discretion, approve a loan to a municipality only if the loan meets the following criteria:
(1) the authority determines the municipality to be creditworthy after evaluating the municipality's loan application and any other information the authority considers relevant; and
(2) the authority determines, on the basis of the completed application and other information, that the municipality would have to pay unnecessarily high borrowing costs in an offering of its municipal bonds to investors because of one or more of the following factors:
(A) the municipality has not issued municipal bonds or the municipality has little outstanding debt;
(B) investors are unfamiliar with the municipality because it has been newly incorporated or has experienced recent rapid growth;
(C) the distance of the state from capital markets makes the municipality's bonds less attractive than bonds of a comparable municipality elsewhere in the United States; or
(D) investors consider the municipality's bonds to have an element of risk because of apprehension of possible temporary economic dislocation due to the loss or prospective loss of a major employer in the municipality.
(b) The authority will, in its discretion, approve a loan not eligible under (a) of this section if the authority determines that the loan will improve the marketability of authority bonds issued to make loans under (a) of this section.
History: Eff. 4/1/76, Register 58; am 10/19/94, Register 132
Authority: AS 44.85.005
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Last modified 7/05/2006