Iowa Higher Education Loan Authority

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Stand-alone bond financings have become the Authority's most frequently used financing program. Funds for each project are obtained through the sale of revenue bonds of the Authority. In stand-alone financings, the Authority serves as a “conduit” to the bond market on behalf of the institution. Bonds can be sold to institutional lenders in "direct placement" transactions or to individual and institutional investors in "public offerings".

Stand-alone bond issues can be structured with fixed or variable interest rates and with or without credit enhancement or ratings. The credit supporting any stand-alone bond issue is that of the borrowing institution or the entity providing credit enhancement. The availability of financing depends in each case upon the creditworthiness of these institutions. Colleges and universities utilizing IHELA as their bond issuer get the benefit of bonds that are exempt from both federal and Iowa income tax, resulting in materially lower financing costs to the institution.

In addition to providing access to the bond market, the Authority's primary objective is to ensure the institution's capital needs are met in the most cost-effective manner. To this end, the Authority stands ready to assist the institution in the selection of an underwriter, trustee, bond counsel, rating agency, letter-of-credit provider, or bond insurer. IHELA also provides consultation on fees, rates, and financial covenant language. Contact the Authority to discuss whether a stand-alone bond issue is the best financing option for your project.

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