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NOT-FOR-PROFIT FINANCING AND SECURITY REQUIREMENTS

By Robert Riley,2014-05-18 06:11
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SECURITY REQUIREMENTS. Investment grade entities. Leveraged Financing. General debenture. Maximum allowable debt service reserve fund requirement under

    New York State Environmental Facilities Corporation

    625 Broadway Albany, New York 12207-2997

    (800) 882-9721 within New York State

    (518) 402-7085 Fax (518) 402-7086

    FINANCING AND SECURITY REQUIREMENTS

    New York Clean Water State Revolving Fund (CWSRF)

    NOT-FOR-PROFIT LAND ACQUISITION PROJECTS

LEGAL: The applicant must be authorized to conduct business in the State of New

    York.

FINANCIAL: Information shown below.

    BORROWER CLASS &

    FINANCING DESCRIPTION SECURITY REQUIREMENTS

    General debenture

    Investment grade entities Maximum allowable debt service reserve

    Leveraged Financing fund requirement under federal tax law

    Letter of credit (LOC) from a bank rated “A”

    or higher, acceptable to EFC and complying Non-investment grade entities with the parameters established by EFC

    Only direct financing (see parameters below)

LETTER OF CREDIT (LOC) PARAMETERS

1. The Letter of Credit (LOC) must be obtained from a bank rated A or better. (If the

    CWSRF Applicant has a banking relationship with a bank that does not satisfy the

    rating requirement, the relationship bank may „wrap‟ its LOC with one from a bank

    that does satisfy the rating requirement.)

    2. The LOC amount must be for the full amount of the outstanding financing plus eight

    months accrued interest at the CWSRF interest rate. The value of the LOC may

    decline over time as the financing is repaid.

    3. The LOC term may be for a period less than the financing term provided that it

    contains an evergreen provision that provides for automatic, or periodic, extension

    of the LOC term and which assigns a right to EFC on behalf of the LOC beneficiary

    (the CWSRF) to draw the full outstanding financing balance if a notice of termination

    is issued by the LOC bank.

    4. Any notice of termination of the LOC must be delivered by registered Mail to EFC

    and provide at least 60 days notice prior to termination.

    5. Any CWSRF Applicant that must secure a LOC as a condition for securing a

    CWSRF financing shall obtain a LOC Commitment Letter from a bank that satisfies

    EFC‟s rating requirements and such Commitment Letter shall be submitted to EFC

    before its application shall be considered complete. The Commitment Letter should

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    explicitly state terms 1 through 4 above. Upon receipt of the LOC Commitment

    Letter and an otherwise complete application, the proposed financing and LOC

    Commitment will be submitted to EFC‟s Loan Committee for consideration of the

    financing application. That LOC must then be executed on or before the date on

    which the CWSRF closing is effective.

    6. If any LOC Commitment is withdrawn prior to closing, the closing will be postponed.

    The applicant shall resubmit a new LOC Commitment for review and the application

    will be reprocessed for Loan Committee approval as if it were a new application 7. The initial LOC origination fee is a CWSRF-eligible expense, but LOC renewal fees

    are not.

    8. EFC reserves the right to require modifications to any proposed LOC presented as

    security for a CWSRF financing.

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