Connecticut Schedules TEFRA Hearing; Possible Changes In NatLUST's Bank Line Up

Richmond, VA  December 11, 2009 - Virginia's Governor Tim Kaine recently gave approval  for the Virginia Small Business Authority ('VSBFA')  to sell up to $100,000,000 of tax-exempt bonds for NatLUST. Proceeds of the VSBFA bond issue will be used to finance UST claims from participating states. NatLUST believes it can lower financing costs to program participants by about 2% per year.

NatLUST has also requested that Illinois and Connecticut each hold TEFRA public hearings in connection with the bond issue. The public hearing is required by IRS regulations whenever tax-exempt private activity bonds are issued on behalf of 501(c)(3) nonprofits such as NatLUST. Connecticut's UST Review Board, chaired by attorney Paul McCullough, has scheduled a hearing for December 21. The meeting will be held at the Department of Environmental Protection's headquarters at 70 Elm Street in Hartford.  NatLUST is awaiting word from Illinois on whether it will grant a public hearing.  

Separately, NatLUST will likely be making some changes to its bank line up in coming weeks. Currently, Chase finances NatLUST's Connecticut program, and Branch Banking & Trust Company ('BB&T') of Winston Salem, North Carolina,  finances NatLUST's Virginia, Illinois, Georgia and Massachussetts programs.  In connection with the upcoming bond issue, NatLUST was expecting BB&T to approve adding the Connecticut program; however, NatLUST recently learned that BB&T will decline to approve any more 'out of footprint' states (e.g. where they don't have branches). BB&T has extended NatLUST's $20,000,000 of credit lines, but NatLUST believes this will be insufficient to accomodate the expected growth in coming months. Accordingly, NatLUST is seeking to bring in a loan participant and/or replace BB&T. NatLUST is in discussions with prospective lenders and we hope to make an announcement in coming weeks.

12/11/2009

<-- back to news