NFMA releases final best practices for State Revolving Funds

The National Federation of Municipal Analysts (NFMA) has released a comprehensive set of best practices for the Environmental Protection Agency s (EPA) Clean Water State Revolving Funds (SRFs) and Drinking Water State Revolving Funds (DWSRFs). This 10-part document provides guidelines for official statements, annual reports, and interim disclosures, focusing on material aspects for credit risk assessment. The document emphasizes the importance of transparency and information flow, with the goal of facilitating communication between analysts, issuers, banking, and bond counsel communities. The first Recommended Best Practices in Disclosure for the State Revolving Fund sector is a result of a collaborative effort, reflecting NFMA s commitment to its mission. The SRFs and DWSRFs, established in 1987 and 1996 respectively, are partnerships between the EPA and states to support municipal wastewater facilities, pollution control, and drinking water treatment projects. The NFMA s guidelines cover various aspects, including: 1. Summary/general description of the issuer and its relationship to the state 2. Description of outstanding SRF programs, including fund type, purpose, and financed projects 3. List of individually pledged obligors, including legal names, security, principal amount, and terms 4. Obligors with delinquencies over 90 days and plans to prevent write-offs 5. Annual revenues, expenses, net revenue available for debt service, and financial coverage ratios 6. Description of revenue sources pledged for bond repayment, including priority of payment, additional bonds test, and flow of funds 7. Perfection of liens, state law, and bankruptcy implications 8. Details on funds, accounts, minimum funding levels, replenishment requirements, and restrictions on bond proceeds 9. Description of issuer s reserves, enforcement mechanics for obligor delinquencies, and interception of state aid 10. Material ongoing litigation, legislation affecting funding, ESG policies, and cybersecurity breaches The N

Source: bondbuyer.com
Published on 2024-09-25