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 3 - Taxable Loan Participation Program › 3 AAC 99.340 - 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, and (2) the
				  borrower will receive economic benefit from the refinancing. 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, which may include improvements in the energy efficiency of an
				  existing building, improvement, or structurean extension of the maturity of the
				  loan, the elimination of call or balloon payment provisions, or other economic
				  benefits.
(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.