Contact: Andrew Hamilton, Financial Advisor, 866-325-7525
or email: email@example.com.
On August 20, 2004, Public Act 93-0968 was signed into law to create the Southeastern Illinois Development Authority (SIEDA). This Authority provides a powerful financing tool for economic development in the Southeastern Illinois Counties of Clark, Clay, Crawford, Cumberland, Edwards, Effingham, Fayette, Hamilton, Jasper, Jefferson, Lawrence, Marion, Richland, Wabash, Wayne, and White.
The Authority has the ability to issue up to $250 million in for industrial projects including, but not limited to, manufacturing, industrial research, transportation, office buildings, ethanol plants, warehousing and distribution, power generation facilities, etc.
SIEDA can issue bonds on behalf of businesses in which debt service is payable exclusively from the earnings of the borrower. In issuing revenue bonds for the borrower, SIEDA acts as a "conduit" or "middle-man." The bonds are sold to insurance companies, banks, mutual funds or brokerage houses on behalf of individuals. The proceeds of the sale are made available to the borrower for the project. The borrower then pays the money back directly to those who bought the bonds.
The major advantages of SIEDA include providing savings of 2-3% lower than conventional financing for manufacturing, allowing all types of non-manufacturing a savings of 1.0-1.5% through a state mechanism that provides a quasi-guarantee of the loan and low operational overhead. SIEDA generally wouldn't seek donations or charge any type of membership fee. SIEDA would operate from fees charged companies to issue these bonds. The Companies that pay these fees recapture the fee by the lower interest rate savings, generally within twelve months of a 20 – 30 year bond.
The benefits of SIEDA Bonds include:
- Long term – Maturity of the bonds is flexible and can range from ten to thirty years
- Low Interest Rate – Rates are generally 2.0% to 3.0% below Prime Rate. The interest rates are discounted to reflect tax-exempt status. Rates range well below conventional financing
- Flexible Terms – Interest rates may be fixed or variable and can finance up to 100% of the eligible project costs
- Favorable Terms – There is no fixed minimum job creation or capital investment requirements, although some jobs have to be created
- Quasi-State Guarantee – The bonds can receive a quasi-state guarantee (moral obligation) from the State of Illinois which allows the borrower to attach to the State's credit strength.