School Bonding Program and Bond Debt Service Discussion
Vermont Bond Bank (VBB) and State Intercept Mechanism
■
■
■
The Vermont Bond Bank (VBB) is the closest Vermont analogue to RIHEBC
Vermont's "state intercept" mechanism (Title 24, Chapter 119, Subchapter 1; 24 V.S.A.
§ 4555 (c)) is comparable to that used in the credit structure for Rhode Island's school
bond program:
(c) Upon receipt by the State Treasurer of written notice from the Bank, or the
corporate trustee exercising rights on behalf of the holders of bonds issued by the
Bank, that a governmental unit is in default on the payment of principal or interest on
a municipal bond or revenue bond acquired or held by the Bank, the State Treasurer
shall immediately withhold all further payment to the governmental unit of any
or all funds appropriated and payable by the State to the governmental unit,
until the default is cured. During the default period, the State Treasurer shall
make direct payment of all, or as much as is necessary, of the withheld
amounts to the Bank, or at the Bank's direction, to the trustee or paying agent
for the bonds, so as to cure, or cure insofar as possible, the default as to the bond or
the interest on the bond.
VBB's state intercept has a programmatic rating of Aa2 from Moody's (i.e., high quality
and subject to very low credit risk)
7
■ PRAGView entire presentation