The Illinois Rural Bond Bank was created in 1989 to promote community development efforts and encourage local governments to undertake public improvement projects by providing low cost capital.

The Bond Bank acts as a "conduit" for local governments by issuing debt in the national bond market and lending the proceeds to participating local governments. Financing needs can be accommodated on either a pooled or a stand-alone basis.

Six pooled bond issues have been completed by the Bond Bank totalling $27, 500, 000 for 45 local governments in Illinois. Projects financed include water and sewerage improvements, school buildings, road improvements, solid waste projects, fire protection equipment and park improvements. Local governments have borrowed as little as $100, 000 and in excess of $2, 000, 000.

THE BOND FINANCE PROGRAM
The Bond Finance program provides low-cost, tax-exempt funds to units of local government throughout rural Illinois for capital improvement projects, refinancing of existing debt, and short-term working cash. Under the Bond Finance program, the Illinois Rural Bond Bank makes loans to local governments by purchasing their local government securities. To fund these purchases, the Bond Bank sells its own bonds in the municipal bond market at preferred rates.

Eligibility. Local governments are eligible to participate in the Bond Finance program if they:
• are entitled to issue debt under Illinois law;
• are located outside the counties of Cook, DuPage, Kane, Lake, McHenry and Will;
• meet established credit standards.

Types of Financing. Local governments borrow funds through the Bond Finance program on either a pooled or standalone basis:
• Pooled includes multiple borrowers and takes place regularly in May and December. Borrowers benefit by sharing the fixed transaction costs.
• Stand-alone is available for single borrowers who are unable to meet the pooled financing schedule and need approximately $5, 000, 000 or more.

Borrowing under the Bond Finance program takes approximately six to eight weeks to complete.

Benefits. The benefits of borrowing funds through the Illinois Rural bond Bank's Bond Finance program include:
• Lower borrowing rates due to the Bond Bank's double tax-exemption, state moral obligation and name recognition in the market;
• Lower costs of issuance due to economies of scale and cost-sharing;
• Flexible loan repayment terms;
• Step-by-step assistance throughout the borrowing process by a nationally recognized team of bond professionals.

AFFORDABLE FINANCING OF PUBLIC INFRASTRUCTURE PROGRAM
The Affordable Financing of Public Infrastructure (AFPI) program allows the Illinois Rural Bond Bank to make small loans to local governments for public purpose projects, including building repairs, equipment purchases, road improvements and other projects.

Eligibility. Local governments that are located outside the counties of Cook, DuPage, Kane, Lake McHenry and Will, and meet established credit standards are eligible to participate in the AFPI program.

Terms. Local governments can borrow up to $100, 000 for up to three years at a fixed rate.

Fees. A fee equal to 2.5% of the loan amount is payable at closing ($1, 000 minimum).

Benefits. The benefits of borrowing funds through the Affordable Financing of Public Infrastructure program include:
• Low borrowing rates fixed for the life of the loan;
• Simplified borrowing process;
• Quick turnaround time (usually within four weeks).

ADDITIONAL INFORMATION
For further information or to receive an application, please contact the Illinois Rural Bond Bank, 427 East Monroe, Suite 202, Springfield, IL 62701, (217) 524-2663.

Illinois Parks and Recreation 29 November/December 1993