The Pooled Loan Program has provided over $2 billion in low-cost loans to Vermont governmental units for long-term capital projects over its 50-year history. Loans are primarily funded through the issuance of highly rated tax-exempt bonds by the Bond Bank. 

Common uses of loans made through the program include:

  • Facilities renovation and construction

  • Road and highway improvements

  • Equipment purchases

  • General infrastructure.

Burlington Waterfront
Loan Process

Most borrowers begin their loan process by contacting the Bond Bank early on to receive an illustrative debt service schedule that can be used for the purposes of estimating potential budget impacts. Borrowers then formally apply to the Bond Bank following engagement of local bond counsel and approval to issue the bond.

Loan Specs/FAQs

  • Eligible borrowers are governmental units including: cities, towns, schools, villages and various districts
  • Require evidence of voter approval and authority
  • Legal opinion from local bond counsel
  • Annual report for three years or three years of financial audits (preferred)
  • Minimum requirement for financial audit from last completed year
  • Term of financing and useful life of asset financed must align

  • Capital projects and equipment purchases legally allowed for governmental units under Vermont statute

  • Winter Pool –  Application due in mid-December with closing to occur on or about February 28th
  • Summer Pool – Application due in mid-May with closing to occur on or about July 31st

Loan AmountUp to 100% financing of project costs
Term
  • Must match useful life of asset(s) financed up to 30 years
  • Applicants may request up to 5 years interest only
Interest Rate*Market rate based on the Bond Bank’s “AA+” rating
Closing CostsNo fees are charged associated with applying receiving loans through the Bond Bank
Payment DatesPayments are due semi-annually on May 1st (interest only) and November 1st (interest and principal)
Drawdown PeriodLoans are fully funded at closing 
PrepaymentBond Bank must provide consent for prepayment that is based on terms of bonds the Bond Bank issues to fund the loan
Requisition of FundsFunds requisitioned from disbursement account in borrower's name by Disbursement Agent
SecurityGeneral obligation or revenue bonds
LegalLocal bond counsel opinion
EnvironmentalNo program requirement other than legal requirements under Vermont statutes 
CovenantsAnnual financial statement submission and timely reporting of material financial events
Underwriting / Credit ReviewBond Bank undertakes credit review followed by board approval prior to issuing loan
* Based on underlying market conditions 
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Mountain view

Approved Loan Bond Counsels

Local bond counsel serves a critical role in confirming the legality of our borrower’s debt issuance. Early engagement of local counsel will ensure that they will be able to provide a preliminary legal opinion alongside a loan application to the Bond Bank. Legal opinions for the Bond Bank require specialized firms that must first be pre-approved. 

Bond Bank Anticipes Winter and Summer Pools from 2018 Forward
AdvantagesConsiderations
  • Bond Bank maintains AA+ rating with low interest rates passed along to borrowers
  • Bond Bank provides technical expertise in organizing, structuring and pricing bonds
  • Economies of scale in accessing the capital markets
  • No upfront and/or on-going fees
  • Streamlined process from application to receipt of funds
  • Active market monitoring for refinancing opportunities with savings passed on to borrowers
  • Term of financing and amortization will always match (i.e. no "put" or balloon maturity)
  • No on-going risk of "catch-up" payments should tax rates change (investors not borrowers own tax risk)
  • Must comply with rules for tax-exempt financed (like all tax-exempt loans)
  • Availability of funding subject to Bond Bank schedule (winter and summer pools)
  • Refinancing of redemption subject to Bond Bank approval
  • Semi-annual payment of interest on May 1st and November 1st
  • Annual payment of principal on November 1st
  • Funds must be requisitioned from the Disbursement Agent (typically arrive in < 24 hours)