FLOOD03596

• County: Statewide
• Community: State of Colorado
• Basin: Statewide
• Title: Water Project Development Financing Needs
• Date: 6/4/1982
• Prepared For: Colorado Water Congress
• Prepared By: Paine Webber, Co.
• Floodplain - Doc Type: Educational/Technical/Reference Information

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SHCRT TERM FINAN::ING
A BRIDGE - NOT A B01\T

We have chosen to caption the short-term financing section -- "A Bridge --
Not A Boat" because short-term financing is a means to get from one identifiable
po int to another. It is not a vehicle to use to venture into uncharted waters
and it is not a vehicle wi th 'tAlich to gamble.
During the last three years countless corporation, political subdivisions,
and non-profi t corporations have borrowed short term in antic ipa tion of lower
IOn:! term borrowing rates only to find themselves looking at the same decision
today as they approach repayment time. Cbviously, there is a time and place for
short term borrowing. It can save money; it can facilitate project construction
by providing planning and engineering study funds; it can bridge the time gap
between construction financing and grant receipt; and in a few select cases it
can provide an alternative financing vehicle to intermediate term financing.

Included wi thin the fr<lllework of short term financing are the following
alternatives:

1) Revenue Anticipation Notes (including tax anticipation)
2) Bond Anticipation Notes
3) Grant Anticipation Notes
4) Commercial Paper
5) Leases

Generally, when reference is made to short term financing the time frame is

thirty days to three years. Occassionally, one will see a Bond Anticipation Note

that will extend to five years, but for the purposes of our discussion today, we

will limit ourselves to three years.

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