Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 13 - Alaska Industrial Development and Export Authority › Chapter 99 - Commercial and Industrial Financing › Article 5 - Development Finance Program › 3 AAC 99.575 - Interest rates and prepayment fees

Current through May 31, 2024
(a) If the
				  authority provides development project financing for a development project that
				  the authority will not own and operate, the initial interest rate on the
				  financing will be set at the time the authority issues a development project
				  financing commitment letter. The initial interest rate will be no less than 250
				  basis points above the interest rate paid on the securities of the United
				  States Treasury that have a maturity date comparable to the term of the
				  authority's financing. In the event that no United States Treasury security is
				  directly comparable in maturity to the authority's development project
				  financing, the authority may use the United States Treasury security the
				  authority in its discretion determines to be most directly comparable as
				  possible. The authority will establish the initial interest rate for the
				  financing within this range based on the authority's evaluation of the relative
				  risk of the transaction. In evaluating the risk of the transaction, the
				  authority may consider the nature of the project applicant and its
				  creditworthiness; the nature of the development project and its financial
				  strengths or weaknesses; the size, length, and other terms of the financing;
				  the collateral for the financing; and any other factors the authority
				  reasonably determines to bear on the risk in the transaction.
(b) If the authority provides development
				  project financing for a development project that the authority will not own and
				  operate, the authority may charge a fixed interest rate for the entire term of
				  the financing or the authority may require that the rate of interest on the
				  financing be adjusted from time to time at intervals the authority decides are
				  appropriate. The authority will select a fixed or adjustable interest rate for
				  the financing, establish the intervals for adjusting the interest rate, and
				  determine the method by which the interest rate is adjusted based on the
				  authority's evaluation of the risk of the transaction and based on the
				  practices of private commercial lenders with respect to comparable financing.
				  In the commitment letter for the development project financing the authority
				  provides to the project applicant, the authority will state whether the rate of
				  interest is fixed or adjustable, the intervals for adjusting the interest rate,
				  and the method by which the interest rate is to be adjusted.
(c) The authority may require a prepayment
				  fee on a development project financing. The prepayment fee will be in the
				  amount the authority determines is appropriate and will be stated in the
				  commitment letter for the development project financing. The authority will not
				  charge a prepayment fee on any prepayment that occurs later than five years
				  after the date of the finance closing or as specified in the covenants of bonds
				  issued for the project financing.
Authority:
AS
						44.88.080
AS
						44.88.085
AS
						44.88.172
AS
						44.88.212