BOARD02014

• Board Meeting Date: 7/23/2002
• Description: CF Section - Policy Revisions - Financial Policy #7 as Outlined at May 20, 2002 Board Meeting
• Board Meetings - Doc Type: Memo

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4. Colorado's farms and ratiches are irreplaceable resources providing
food, fiber, open space, wildlife habitat, stable economies in rural areas .
and many other benefits. To help sustain the vitality of these
economies, the Agricultural Rate will be calculated as 50 percent of
the Baseline Rate rounded, to the nearest one-quarter of one percent.
5. The 30-year lending rate lp.ay be reduced for each lending category by
one-quarter of one percent for all loans with maturities of 20 years or
less but more than 10 years and by one-half of one percent for all loans
with maturities of 10 years or less,
6. For specific projects that involve matters of statewide concern, such as
interstate compacts, the Board may establish a lending rate somewhat
lower than the adopted rate for the particular class of borrower.
7. For project borrowers thatifall into more than one lending category, Le.
an agricultural irrigation' company with municipal shareholders, a
weighted average lending rate will be established based on the percent
ownership of each lending category within the borrower's
organization. The lending rate will be revised at any time during the
life of the loan when an ownership change would increase or decrease
the weighted average by more than 0.5%

To establish an annual lending rate structure for Construction Fund and
Severance Tax Trnst Fund Peripetual Base Account loans.

APPLICABILITY: This policy and procedure apply to all applications for loans from the .
CWCB Construction Fund and Severance Tax Trust Fund Perpetual Base
Account.

PURPOSE:

PROCEDURE:

The CWCB staff will compile the closing weekly yields for the 30-year
"A" rated municipal bond for the six months preceding the May Board
meeting of each year and estimate the bond's average annual yield. A
lending rate structure will then be developed as outlined above and will be
presented to the CWCB at the May Board meeting of each year. The
interest rates calculated based on this procedure will be effective for
Construction Fund and Severance Tax Trnst Fund Perpetual Base Account
loan applications for the upcoming Fiscal Year and will be effective July 1
through the following June 30;

* Standard and Poor's definition ofa~ "A" bond ratil,1g is: "A debt rated 'N has a strong capacity
to pay intlirest and repay principal although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher rated categories."

Approved by the CWCB
May 20, 2002 Board Meeting
Agenda Item #9

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