Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 13 - Alaska Industrial Development and Export Authority › Chapter 103 - Arctic Infrastructure Development Program › 3 AAC 103.120 - Interest rates and other loan terms

Current through May 31, 2024
(a) The initial
				interest rate on the Arctic infrastructure development program financing will
				be set at the time the authority issues an Arctic infrastructure development
				program 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 as directly comparable as
				possible. The authority will establish the initial interest rate for the
				financing 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)
				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 Arctic infrastructure development program
				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 for an Arctic infrastructure development program
				financing. The prepayment fee will be in the amount the authority determines is
				appropriate and will be stated in the commitment letter for the Arctic
				infrastructure development program 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 Arctic infrastructure development program financing.
(d) In setting the terms and conditions of
				financing under this section, the authority may treat more favorably than
				otherwise would be the case an Arctic infrastructure development that will
				provide employment in an area of chronic or high
				unemployment.
Even though the adoption of 3 AAC 103.120 was effective
					 12/3/2015, it was not published until Register 218, July
					 2016.
Authority:
AS
					 44.88.085
AS 44.88.800
AS 44.88.820
AS 44.88.830