IDAHO MUNICIPAL BOND BANK

I am proud to present to you, the "Idaho Municipal Bond Bank," a new financing program designed specifically for Idaho municipalities. Through the Bond Bank, Idaho municipalities will be able to join together and gain access to the capital markets for their public purpose borrowing needs. Some key advantages that the Bond Bank provides Idaho municipalities are:

• Reduced Interest Rate Costs
• Savings on Bond Issuance Costs
• Reduced Staff Time and Effort Required
• Permanent and Perpetual Source for Infrastructure Financing

I invite you to investigate this unique program to see if it meets your borrowing needs. As stewards of Idaho monies, it is our responsibility to manage those monies in the most economical way possible. The Idaho Municipal Bond Bank can provide your municipality with the savings it needs to deliver its best service to the citizens of Idaho.

Ron G. Crane
State Treasurer

The Idaho Municipal Bond Bank came into existence as a result of a Constitutional Amendment passed by the voters in 2000. Enacting legislation was passed by the 2002 legislature.

The municipal bond bank is a state level entity, which in essence lends money to local governments or taxing districts (including schools) by bundling their smaller or separate bond issues into one large bond guaranteed by the state.

For example, if several taxing districts around the state issue bonds totaling $40-50 million dollars, then the State Treasurer can issue one large bond in lieu of the entire amount and pass the cost savings of issuance and reduced interest rate on to the local municipalities. This way there will be only one financial advisor, one bond counsel, one underwriter and one paying agent - rather than having each of these individuals for every single issue.

In addition to the cost of issuance savings, the one large bond issued by the Treasurer will be rated by the rating agencies, thereby resulting in a lower interest rate than would otherwise be available to the smaller unrated bonds.

In essence, the State Treasurer is giving Idaho municipalities access to the capital markets, which they would not normally obtain or would have to pay exorbitant fees in order to access those markets.

All of this results in significant cost savings to the property tax payers in Idaho who will be servicing the debt on these bonds. It is important to note that this Municipal Bond Bank in no way circumvents the voter approval election process required for bond levies. The bonds must still be approved by the local voters before application can be make to the Bond Bank.

The Idaho State Treasurer serves as chairman of the Idaho Municipal Bond Bank along with a member of the Idaho House of Representatives, the Idaho Senate and two members at-large appointed by the Governor.

The Idaho Municipal Bond Bank will issue its first bond in the fall of 2002.