Public Agency Revenue Bonds

Government agencies issue bonds to finance a variety of economic or public development projects for private and public entities. When investors purchase bonds, they essentially lend money to the borrower through the issuer. In return for the bond proceeds, the borrower promises to pay the investors/bondholders the principal amount plus a specified rate of interest over the life of the bonds based on the bonds debt service payment schedule. In this way, a bond is similar to a complex loan.

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$5.5 billion

Total green and social bonds issued by IBank

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60,627

Jobs that have been created through bond-financed projects in California

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$55 billion

Total bond activity

Municipal Bonds

Bonds issued by government entities are called municipal bonds. The bonds can be issued for public or economic development projects. The proceeds of the public bonds are used to finance projects that benefit the community such as roads, bridges, sewers, parks, water treatment, and schools. The proceeds of the economic development bonds, issued for government agencies, are used to finance projects that benefit the governmental agency such as expanding their facilities. Most bonds issued by government entities are tax-exempt. This means interest on these bonds is excluded from gross income for federal tax purposes. In addition, interest on the bonds is exempt from state of California personal income taxes.

What is a conduit bond issuer?

As a conduit issuer, IBank does not underwrite bonds. IBank issues bonds on behalf of a borrower and then lends those proceeds to that borrower. The bonds are special, limited obligations payable solely by the borrower’s payments. The borrower provides security to the bondholder and agrees to repay the bonds.

Public Agency Revenue Bonds (PARBs)

Bond financings for various state entities’ economic or public development projects and programs.

Examples IBank Issued Public Agency Revenue Bonds

These include state entities or programs, such as the Clean Water State Revolving and Drinking Water State Revolving funds, Expansion of the CalSTRS headquarters building, and toll bridges. Schools can also qualify for a variety of improvements or construction.

Qualified Projects

Expand unique programs of specific state and local government agencies used for the furtherance of governmental and qualified purposes including the construction of highways and roads, tunnels, airports, bridges, public transit, rail transport (light rail, streetcars, etc.), water/wastewater systems, telecommunications infrastructure, health infrastructure, power generation/transmission systems, sewer systems, solid waste (collection and disposal), parking garages, highspeed broadband, and schools, as well as facilities and equipment used in providing related qualified services to such entities.

IBank can issue tax-exempt and/or taxable bonds for public entities that own, control, or maintain assets that utilize a P3 structure. P3s usually involve long-term contracts of up to 30 to 50 years and may cost millions of dollars to over a billion dollars. IBank’s Policies and Procedures for Conduit Revenue Bonds allows financing up to 50 years. IBank can issue large bond issues over a billion dollars.

Examples of IBank Issued Bonds

IBank issues bonds for a variety of projects throughout the state including museums, educational facilities and performing arts centers, research institutes, charitable organizations, energy-efficiency projects for healthcare facilities, manufacturing facilities and more. Some of the most iconic projects that have been financed with the help of IBank issued bonds include projects for the Petersen Automotive Museum, the Academy Museum of Motion Pictures, the J. Paul Getty Museum and Villas, The Broad, Segerstrom Center for Arts, Los Angeles County Museum of Art, California Academy of Sciences, San Francisco, Columbia College, UCSF 2130 Third Street, The J. David Gladstone Institutes, The Scripps Research Institute, The Rand Corporation, SRI International, Goodwill, YMCA of San Francisco, The Exploratorium, the B Street Theatre (Sophia), SMUD Museum of Science and Curiosity (MOSAC), Planned Parenthood, Adventist Health, San Francisco Aids Foundation, PIH Health Energy Projects, and more. Check out some of the projects that have been financed with the IBank issued bonds.

Examples of IBank Issued Bonds

Frequently Asked Questions and Fact Sheet

IBank Issued Bonds

Q: Must the facilities be open to the public?

A: Yes, projects financed through PARBs must be open to the public.

Q: Is there a specific application to be filled out by borrowers interested in PARBs?

A: No, there are no structured applications to apply for PARBS or public agencies’ economic development projects. Requests for both types of projects are continuously accepted. Please contact the IBank Bond Unit to discuss any project before applying. IBank representatives provide technical assistance and work with borrowers throughout the process.