Tax-Exempt Financing

Bond Issue Steps and Participants

Bond Issue Steps

  • Feasibility Study and Finance Team – Decide if your project can be done through the Maricopa Contact IDA (Contact Us for help) and assemble finance team.
  • Complete Application and Pay Fee – Currently, a $3,000 non-refundable fee is due with application.
  • Inducement Resolution – Resolution of issuer indicating intent to issue bonds for benefit of project in specified amount. May not be applicable for Non-profit or Charter School Financings
  • Publish TEFRA Notice and have Hearing– Notice of public hearing must be published at least 2 weeks prior to hearing date; must identify project and owner; and must specify maximum dollar amount.
  • Obtain Bond Volume Cap – Annual Funding limit set by Federal Government for tax-free bonds (except for 501(c)(3) organizations).
  • Draft Bond Documents – Generally done concurrently with above steps.  Typically takes two to six weeks but can take longer.
  • Government Approvals – Receive Maricopa County IDA Board approval, Maricopa County Board of Supervisor approval and Arizona State Attorney General signoff.
  • Print and Mail Preliminary Official Statement, if required

Bond Issue Participants

  • Issuer – Political subdivision (Maricopa County IDA) issues bonds to Bondholders (Lenders) who use their own money to lend to the borrower. The Maricopa County IDA has no direct financial responsibility.
  • Bondholders must look to borrower’s ability to pay or credit enhancement in event of nonpayment. The Bank may underwrite and privately place loans. (stand-alone loan)
  • Borrower – the ultimate user of bond proceeds and obligor.  Borrower makes principal and interest payments to bond trustee.
  • Underwriter or Placement Agency structures the transaction and prices and sells the bonds to the investors or places the bonds. Banks may privately place bonds (hold for their own account).
  • Trustee – Third party commercial bank or trust company to whom Issuer assigns its rights and to whom credit enhancement runs; 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.

Maricopa County IDA

Creighton University - $62,000,000

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