Bond Issuance Guidelines
Per the California Debt Limit Allocation Committee (CDLAC) Regulations, these guidelines describe what CIDFAC would expect to see given a particular rating. The Authority acknowledges that each financing must be reviewed individually and that additional provisions may be considered if those provisions are a necessary part of a prudent borrowing and/or issuance strategy.
||Debt Issuance Provisions
|I. Debt Rated A-/A-/A3(1) or Better
- Marketability of the bonds
- Experience level and the track record of the entity selling the bonds on behalf of the Applicant
- Financial strength of the Project and Project Sponsor
- Additional sources of repayment other than the Project
- The rights, capability, and resources of the parties to the transaction other than the Project Sponsor to complete and operate the Project in the event of default.
|II. Debt Rated a minimum BBB--/BBB-/Baa3(1) and Debt Rated less than BBB-/BBB-/Baa3(1), or unrated
- Purchasers of bonds (in both primary and secondary markets) limited to �Qualified Institutional Buyers�(QIB), as QIBs are defined under Securities and Exchange Commission Rule 144A, promulgated under the Securities Act of 1933.
- An �investor letter� from initial investors indicating that they meet the investor criteria for the offering pursuant to CDLAC�s Regulations, Section 5062 (2). The investor must indicate that they have no present intention of reoffering the bonds in a subsequent public offering (but may subsequently transfer the bonds in a limited offering to another permitted transferee), that they have a sophistication to evaluate the merits and risks of the investment and suffer a loss of the investment, that they have been furnished all the information which they and their investors requested on the offering, and have had an opportunity to ask questions relating to that information and other such matters.
- A traveling investor letter of any subsequent transferee subject to the size of the minimum denomination ($100,000).
(1) Represents ratings by Standard & Poor's, Fitch and Moody�s respectively.