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 2 - Tax-Exempt Loan Participation Program › 3 AAC 99.240 - Terms of tangible personal property loans

Current through May 31, 2024
(a) The authority
				  may participate in a loan made by an originator to acquire or build fixtures,
				  machinery, equipment, or other tangible personal property, including tangible
				  personal property that constitutes improvements in energy efficiency, if the
				  loan satisfies the conditions prescribed in this section.
(b) The authority may participate in a loan
				  made by an originator to refinance an outstanding loan described in (a) of this
				  section if, in addition to other requirements of this section, the authority is
				  satisfied that (1) the loan to be refinanced was not made with proceeds of
				  outstanding general obligation indebtedness of the authority nor relates to a
				  project or qualified energy development that was originally financed with
				  outstanding general obligation indebtedness of the authority, (2) the borrower
				  will receive economic benefit from the refinancing, and (3) the loan is
				  permitted under the code. The economic benefit to the borrower may be in the
				  form of an interest rate reduction, a reduction of debt service payments, an
				  extension of the maturity of the loan, the elimination of call or balloon
				  payment provisions, or other economic benefits, including improvements in the
				  energy efficiency of an existing building, improvement, or structure.
(c) The principal amount of a tangible
				  personal property loan may not exceed 75 percent of the appraised value of the
				  tangible personal property collateral offered as security for the loan, except
				  that in no event may the tangible personal property loan to be purchased under
				  this section exceed the total of loan proceeds used to refinance an existing
				  debt plus the cost of new construction, expansion, or acquisition, unless the
				  additional amounts of the loan to be purchased are restricted to uses approved
				  by the authority to finance commercial activity in Alaska by a business
				  enterprise.
(d) A tangible personal
				  property loan must be secured by a security agreement that is a first lien on
				  the tangible personal property.
(e)
				  The term of a tangible personal property loan may not exceed 15 years or 75
				  percent of the economic life of the collateral offered as security for the
				  tangible personal property loan, whichever is less, as determined by the
				  authority.
(f) The authority may
				  allow the loan originator to amortize its portion of the loan using a shorter
				  amortization schedule than the amortization schedule for the authority's
				  portion provided
(1) in the authority's
				  opinion, the project or qualified energy development financed can support the
				  increased debt service;
(2) the
				  accelerated amortization schedule is required to induce the originator to make
				  the loan; and
(3) the originator's
				  term is at least one-half of the amortization term of the authority's
				  participation or seven and one-half years, whichever is less.