Description: Local Government Bonds are those specifically issued through the Local Government Bond section of WKRDA’s statute. Local Government Bonds are generally exempt from federal income taxes; these bonds are also exempt from the alternative minimum tax. In addition, properly structured, these bonds can be secured by an intercept of state funding, further securing the bondholder.
Benefits: The benefits of Local Government Bonds include:
- Long term – Maturity of the bonds is flexible and can range from ten to thirty years.
- Low Interest Rate – Rates are generally 2.0% to 3.0% below Prime Rate. The interest rates are discounted to reflect Tax-Exempt status. Rates range well below conventional financing.
- Flexible Terms – Interest rates may be fixed or variable and can finance up to 100% of the eligible project costs.
- Favorable Terms – There is no fixed minimum job creation or capital investment requirements, although some jobs have to be created.
- Quasi-State Guarantee – The bonds can receive a quasi-state guarantee (Moral Obligation) from the State of Illinois which allows the borrower to attach to the State’s credit strength.
Eligibility: Any unit of local government including school districts, park districts, library districts, cities, villages and townships as well as other statutory established political subdivisions. Local Government Bonds do not require volume cap.
Fees: A $2,000 non-refundable application fee is due when the application is submitted. An issuance fee of 60 basis points and Professional fee of 20 basis points due at closing plus the cost of Issuer’s legal counsel.
Contact: For an application or additional information please contact Andrew Hamilton, Executive Director, Will Kankakee Regional Development Authority (WKRDA), Two Rialto Square, 116 N. Chicago Street, Joliet, Illinois 60432, Tel: 815/723-9070.