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<br />Report of The Colorado State Auditor <br /> <br />23 <br /> <br />Loan Interest Rates Have Not Reflected Changing <br />Market Conditions <br /> <br />Over the past ten yeats, long-term <br />interest rates varied considerably. For <br />example, interest rates, on municipal <br />bonds ranged from 6 to over 12 percent. <br />Since the Board set interest rates on <br />loans at 5 percent, the Board's rates did not reflect changing market rates as <br />shown in the following chart. <br /> <br />Long-term tax-exempt interest <br />rates have ranged from 6 to 12 <br />percent during the past ten years. <br /> <br />.Board Interest Rate Compared to the <br />Tax Exempt Municipal Bond Rate <br /> <br />13% <br /> <br />9% <br /> <br /> <br />- Market Rate <br />-+- Board Rate <br /> <br />11% <br /> <br />1% <br /> <br />5% <br /> <br />3% <br />811 82 I 83 I 84 I 85 I 86 I 87 r 88 I 89 I 90 I 91 192 <br /> <br />Source: SAG analysis of data from Legislative Council. <br /> <br />A Board task force is now developing guidelines for determining interest rates on <br />project loans under the new statutory' requirements. These guidelines will <br />probably include other factors that will be considered when setting interest rates. <br />