Ohio Treasurer of State Robert Sprague recently announced a new COVID-19 Community Response Initiative (the initiative). The initiative provides for a pooled short-term note issuance available to all local governmental entities that wish to participate. This debt issuance structure allows for significant cost of issuance savings, as well as administrative ease by allowing local government entity borrowers to bypass many of the steps traditionally necessary by Ohio law when issuing short-term debt.
The initiative allows participating governmental entities to sell notes to a trust established by the treasurer’s office. The trust will then issue public debt to fund the purchase of the notes. Upon the closing of the public debt issuance, the trust will distribute the proceeds to participating governmental entities. Such participants would then make principal and interest payments to the trust at maturity to retire the note.
The term of the notes that are sold by the governmental entities to the trust may be for up to one year, with borrowing and repayment taking place within the same fiscal year. It is possible that there will be another similar borrowing opportunity later this year or next year.
In order to take advantage of the initiative, interested local governmental entities are required to submit an application to the treasurer’s office no later than June 26, 2020. The note proceeds are expected to be available by the week of July 20, 2020.
The initiative is an excellent opportunity for local governmental entities to obtain funding to address liquidity issues and account for funding shortfalls as a result of the COVID-19 crisis. However, the applications are only available for a limited time. If you believe that your community can benefit from the initiative, please contact Chris Connelly or Steve Cuckler.
Please visit our COVID-19 Toolkit for all of Taft’s updates on the coronavirus.