Bond Issue Steps and Participants
Bond Issue Steps
Project and Finance Team: Decide if your project can be done through the Maricopa County IDA (Contact Us for help) and assemble finance team.
Complete Application and Pay Fee: Currently, a $3,000 nonrefundable fee is due with the application.
Inducement Resolution: Resolution of Issuer indicating intent to issue bonds for benefit of a project in specified amount. Not applicable for nonprofit or charter school financings.
Publish TEFRA Notice and hold Hearing: Notice of public hearing must be published at least 1 week prior to hearing date; must identify project and owner; and must specify maximum dollar amount.
Obtain, if necessary, Bond Volume Cap: Arizona Volume Cap is administered by the Arizona Finance Authority.
Draft Bond Documents: Generally done concurrently with above steps. Substantially final bond documents must be presented to the Maricopa County IDA prior to final approval by the IDA Board.
Government Approvals: Receive Maricopa County IDA Board approval, Maricopa County Board of Supervisor approval, and Arizona State Attorney General “project” qualification under A.R.S. § 35-721(F).
Bond Issue Participants
Issuer: Maricopa County IDA (political subdivision) issues bonds that are sold to bondholders (lenders). The bond proceeds are loaned by Maricopa County IDA to the Borrower. The Maricopa County IDA has no direct financial responsibility.
Bondholders (Lenders): Must look to Borrower’s ability to timely make its loan payments.
Borrower: The ultimate user of bond proceeds and obligor. Borrower makes principal and interest payments to bond trustee.
Underwriter (Placement Agent): Structures the transaction and prices and sells (or places) the bonds to the investors.
Trustee: Third party commercial bank or trust company to whom Issuer assigns its rights; uses funds from Borrower to pay principal and interest due on bonds to bondholders; and acts on behalf of bondholders to safeguard trust estate.
Bond Counsel: Prepares bond documents and provides opinion that bonds are validly issued, enforceable, and interest income is tax-exempt to the bondholder.
