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Click on the links below to review FAQ’s, Websites of Interest and Conference Materials.

Frequently Asked Questions

Websites of Interest

Past VEHBFA Conference Materials


Frequently Asked Questions

What is the Agency’s role in a financing?

Federal regulations allow the Vermont Educational and Health Buildings Financing Agency to issue bonds or notes on a tax-exempt basis on behalf of certain Vermont nonprofit institutions. The bonds or notes are sold to qualified investors with the proceeds loaned to the borrowing institution. The Agency provides access to the capital markets, but does not directly loan funds of its own and does not enhance the credit quality nor stand behind the bonds. The bonds are repaid solely by the borrowing institution. In addition, the State of Vermont does not provide any pledge or support to the payment of any of the Agency’s bonds or notes.

Who is eligible to borrow through the Agency?

Eligible Vermont institutions include:

  • Libraries
    • Any nonprofit library that servers the public
  • Educational Institutions
    • Any private or independent nonprofit university, college, primary or secondary school in the state
    • The University of Vermont and Vermont State Colleges
  • Healthcare Facilities
    • Any nonprofit hospital as defined in section VSA, Title 18, S1902.
    • Any nonprofit institution whose purpose is devoted primarily to the operation of diagnostic and therapeutic facilities for medical, surgical or psychiatric care of ambulatory patients
    • Any nonprofit
      • Licensed nursing home
      • Assisted living facility
      • Continuing care retirement facility
      • Residential care facility or similar nonprofit facility for the continuing care of the elderly or infirm, provided that such facility is owned or under common ownership with an otherwise eligible institution

Note: Healthcare facilities and equipment to be financed may need a CON (Certificate of Need) issued by the Green Mountain Care Board and/or COA (Certificate of Approval) issued by the Agency of Human Services.

Which financing alternative is best?

A number of factors contribute to the determination of which financing alternative is most appropriate, including the credit quality of the borrower, the expected size of the bond transaction, and the financing objectives of the borrower. Borrowers that are investment grade (BBB rated or higher) or borrowers that can obtain credit enhancement would be eligible to participate in a public sale. Smaller loans may be more appropriate for a private placement. With a fixed rate transaction, the terms and loan amortization are fixed for the life of the loan, at least to the call protection date, which is usually ten years. With a variable rate transaction, interest rates will be periodically reset. Variable rate bonds may generally be repaid on any interest payment date, creating more flexibility for the borrower. One of the roles of the Agency is to help a borrower determine which financing alternative is more appropriate given the individual circumstances of the borrower.

How are interest rates determined?

Interest rates are determined by negotiation with the underwriter or investor(s) and are based on the credit quality of the transaction (rated/unrated or enhanced/unenhanced), the length of the loan, and whether it is fixed or variable rate.

What is the cost of issuance involved in a transaction?

The cost of issuance on a financing depends on the type of transaction and its complexity. The Agency charges a minimal fee for its involvement in each financing, and there are additional fees for the participants including, but not limited to, underwriter or placement agent, borrower’s counsel, bond counsel, financial advisor, rating agencies, if necessary, and sources of credit enhancement. If necessary, up to 2% of the bond can be used to finance the costs of issuance on a tax-exempt basis. Financing for cost in excess of 2% must be financed on a taxable basis.

Are State tax dollars used to fund VEHBFA?

No, VEHBFA’s budget is funded using fees charged to its borrowers and earnings from its reserves.

Does VEHBFA become involved with the construction of the facility being financed?

Aside from reviewing and approving borrower requisitions for payment from bond proceeds, VEHBFA does not get involved with the design or construction of a financed facility.

Websites of Interest

Past VEHBFA Conference Materials

Presentations delivered at VEHBFA’s 2015 borrower’s conference:

Presentations delivered at VEHBFA’s 2012 borrower’s conference:

Presentations delivered at the National Association of Health and Educational Facilities Finance Authorities conferences can be found here.