Our friends at the LGC have recently announced policy and process changes that will be useful to local governments in getting financings approved.
Reducing the audit blackout period
It has been LGC policy for some time that you couldn’t get a financing approved in November – or later – unless the LGC had your new audit (that is, the one for the immediately preceding year ended June 30) in hand. Now, you’ll be able to get financings approved in both November and December with the “old” audit. There are some limitations if that old audit wasn’t filed by the end of the succeeding fiscal year, but if the audit is that late you can’t expect any breaks. These changes won’t address the staffing crisis in the finance function, but they will help soften the repercussions.
Simplified approvals for refundings
The LGC recently adopted procedures that streamline required approvals for refunding transactions. The Commission and staff never stood in the way of approving refinancings that would save you money (with one particular exception, which is not changed by this new process), but you still had to go through an application process and wait for formal approval at a monthly LGC meeting. Now, that formal process won’t be required so long as your refunding does not extend the term of the loan, doesn’t include funding beyond repaying the old loan and paying financing costs, and you take your savings evenly over the financing term. This will reduce the financing timeline and generally make the process easier for local governments, their advisors and LGC staff. You can read the “blanket resolution” for revenue bond refundings here. There are substantially similar procedures now in place for general obligation bonds and installment financings.
Contact us if you want to talk about these policies or if there is anything else we can help with. Click here to read our disclaimer, click here to subscribe to our newsletter and click here to learn more about our public finance practice.