HomeMy WebLinkAboutRes 2010-03 Sale Of PPF Loans To AIDEA Sept 2010***~IBE~
....A.., ....A.., Alaska Industrial Development ~ ~ and Export Authority
TO: Board of Directors
Alaska Energy Authority
MEMORANDUM
FROM: Steve Haagenson 5~
Executive Director
DATE: September 3, 2010
SUBJECT: Resolution No. 2010-03
Sale of certain Power Project Fund Loans
Resolution No. 2010-03 approves the sale of loans from Power Project Fund (PPF) to the
Alaska Industrial Development and Export Authority (AIDEA.) This sale of assets will
recapitalize the PPF with funds needed for future energy project loans.
AEA uses the PPF to make loans to finance energy projects. The PPF is a significant financing
tool used as a matching fund source by Renewable Energy Fund (AS 42.45.045) grantees. In
Chapter 82, SLA 2010 the legislature expressed its intent that the PPF serve as the main
source of state assistance for energy projects.
Chapter 70, SLA 2010 authorizes AEA to sell and AIDEA to purchase certain loans from the
PPF under the memorandum of understanding (MOU) dated February 17, 2010. This MOU
outlines the terms and conditions of the sale and purchase of the PPF Loans.
The MOU includes provisions for AEA to repurchase from AIDEA loans which later default. This
repurchase provision maximizes the amount paid by AIDEA by substantially reducing financial
risk to AIDEA thus allowing AIDEA to purchase the loans without significant discount.
The sale price of the PPF Loans equals the present value of the PPF Loans, estimated in the
MOU as of July 2010 to be $20.6 million. The present value of the PPF Loans is defined as the
present value of the scheduled loan payments over the remaining life of the PPF Loans at a
discount rate of 6.02%. This discount rate is equivalent to AIDEA's return on its investments for
the 3-year period ending September 30, 2009.
If a PPF Loan defaults AEA agrees to repurchase the loan with available unencumbered and
uncommitted funds in the PPF. If adequate funds are not available for repurchase, AEA will
make payments to AIDEA as funds become available in the PPF, with interest on the unpaid
balance at the annual rate of 4% starting 30 days after AEA is notified of default.
Staff recommends approval of Resolution No. 2010-03.
813 West Northern Lights Boulevard • Anchorage, Alaska 99503-2495
www.aidea.org • 907/771-3000 • FAX 907/771-3044 • Toll Free (Alaska Only) 888/300-8534 • www.akenergyauthority.org
PPF LOAN SALE AGREEMENT
THIS PPF LOAN SALE AGREEMENT (the "Agreement") is made and dated as of the_
day of September, 2010, by and between the ALASKA ENERGY AUTHORITY ("Seller" or
"AEA"}, and the ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY
("Purchaser" or "AIDEA").
RECITALS
A. AEA is a public corporation of the State of Alaska in the Department of Commerce,
Community and Economic Development of the State of Alaska. AEA has a separate and
independent legal existence under AS 44.83.020 et. seq.
B. AIDEA is a public corporation of the State of Alaska and a body corporate and politic
constituting a political subdivision within the Department of Commerce, Community and
Economic Development of the State of Alaska. AI DEA has a separate and independent
legal existence under AS 44.88.010 et. seq.
C. The Power Project Fund ("PPF") is established as a separate fund of AEA under AS
42.45.01 O(a). Amounts in PPF are available for loans ("PPF Loans") for certain energy
related purposes.
D. AEA and AIDEA entered a Memorandum of Understanding dated February 17, 2010
("MOU"}, under which, inter alia:
1. AEA agreed to sell, and AIDEA agreed to purchase, the outstanding PPF
Loans identified in Exhibit A to the MOU on the closing date, for a purchase price equal to
the present value as of the closing date of all PPF Loans identified in Exhibit A to the
MOU.
2. In the MOU, the "present value" of a PPF Loan is defined to mean the present
value of all scheduled loan payments on the PPF Loan over the entire remaining life of the
PPF Loan, using a discount rate of 6.02%.
3. AEA agreed to repurchase from AIDEA any outstanding PPF Loan if the
borrower defaults on payment after the sale. The repurchase price shall equal the present
value of the loan determined on the date of the payment default by the borrower, less any
payments received by AIDEA after the payment default date. AIDEA may exercise the
right to have AEA repurchase a PPF Loan by sending notice to AEA of the payment
default. AEA shall pay AIDEA within 30 days of the notice of payment default from
unencumbered and uncommitted funds in the Power Project Fund. If the PPF has an
inadequate amount of unencumbered and uncommitted funds to repurchase the PPF
Loan from AIDEA within 30 days of the notice of default, AEA shall make payments to
AIDEA with unencumbered and uncommitted funds as they become available in the
Power Project Fund (through repayments from other PPF Loans or otherwise), with
interest on the unpaid balance at the annual rate of four percent (4%) from the date 30
days after the notice of default. Nothing in the MOU precludes AIDEA from rescinding a
notice of default.
E. Under AS 44.83.01 0(1), with legislative approval, AEA may sell PPF Loans.
PPF Loan Sale Agreement Page-1-
F. Under AS 44.88.080(30), with legislative approval, AIDEA may purchase from AEA
PPF Loans as an investment of the revolving fund (AS 44.88.060).
G. Under sec. 5, ch. 70, SLA 2010, the legislature approved AEA selling, and AIDEA
purchasing, PPF Loans under the MOU dated February 17, 2010.
H. AEA and AIDEA each desire to complete the sale and purchase of PPF Loans, as
provided in the MOU dated February 17, 2010, and this Agreement. AEA and AIDEA
agree that the sale should not include any PPF Loan identified in Exhibit A to the MOU
which has a current payment default as of the closing date. Exhibit I to this Agreement
identifies the outstanding PPF Loans to be sold and purchased under this Agreement.
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants and conditions contained herein, the parties agree as follows:
1. Sale of PPF Loans. On the Closing Date, AEA shall sell and assign to AIDEA, and
AIDEA shall purchase and assume from AEA, AEA's rights and interests in the PPF
Loans identified in Exhibit I, and all notes, deeds of trust, guarantees, and other security
documents associated with the PPF Loans.
2. Purchase Price. The purchase price of PPF Loans sold under paragraph 1 shall
equal the present value as of the closing date of all PPF Loans identified in Exhibit I.
Under this Agreement and the MOU, the "present value" of a PPF Loan is defined to
mean the present value of all scheduled loan payments on the PPF Loan over the entire
remaining life of the PPF Loan, using a discount rate of 6.02%.
3. Loan Documentation. AEA shall endorse over to AIDEA each PPF Loan and note,
and assign to AIDEA AEA's interests and rights under each deed of trust, guarantee, and
all other documents securing payment of each PPF Loan. AEA shall deliver each PPF
Loan note to AIDEA at closing. AEA shall also assign or endorse to AIDEA, AEA's
interests under each policy of title insurance or private mortgage insurance and each
policy of hazard, casualty or fire insurance and endorsements thereof, as appropriate.
4. Loan Servicing. In order to minimize confusion to PPF borrowers, staff of AIDEA will
continue to service the PPF Loans, but on behalf of both AEA and AIDEA, and will allow
borrowers to continue to make payments payable to AEA. Any payment received payable
to AEA related to a PPF Loan, including insurance proceeds, will be held in trust on behalf
of AIDEA for deposit into an AIDEA account.
5. Payment Terms. The purchase price for the PPF Loans shall be paid by transfer of
funds into the PPF on the closing date.
6. Closing. Closing shall occur at the offices of AEA and AIDEA at 813 West Northern
Lights, Anchorage, Alaska, 99503 on September_, 2010.
7. Time of Delivery. Delivery of possession of AEA's interests in the PPF Loans
identified in Exhibit I, shall be deemed to have occurred for all purposes at the Close of
Business on the Closing Date, and all risk of loss, whether or not covered by insurance,
shall be on AEA until the Close of Business on the Closing Date.
PPF Loan Sale Agreement Page-2-
8. Repurchase upon Default. AEA agrees that it shall repurchase from AIDEA any
outstanding PPF Loan if the borrower defaults on payment after the sale, as follows:
a. The repurchase price shall equal the present value of the loan determined on
the date of the payment default by the borrower, less any payments received by AIDEA
after the payment default date. The "present value" of a PPF Loan is defined to mean the
present value of all scheduled loan payments on the PPF Loan over the entire remaining
life of the PPF Loan, including any payments in default, using a discount rate of 6.02%.
b. AIDEA may exercise the right to have AEA repurchase a PPF Loan by sending
notice to AEA of the payment default, and that AEA shall pay AIDEA within 30 days of the
notice of payment default from unencumbered and uncommitted funds in the Power
Project Fund. AEA shall pay AIDEA within 30 days of the notice of payment default from
unencumbered and uncommitted funds in the PPF.
c. If the PPF has an inadequate amount of unencumbered and uncommitted
funds to repurchase the PPF Loan from AIDEA within 30 days of the notice of default,
AEA shall make payments on the repurchase to AIDEA with unencumbered and
uncommitted funds as they become available in the PPF (through repayments from other
PPF Loans or otherwise), with interest on the unpaid balance at the annual rate of four
percent (4%) from the date 30 days after the notice of default.
d. In the case of the repurchase of any PPF Loan under the terms of this
Agreement or the PPF Loan Sale Agreement, AEA shall prepare an endorsement of the
Note and an assignment for execution in recordable form of all security documents and
insurance policies pertaining to the loan. AIDEA agrees to review such documents and,
finding each in good order, to execute them in a timely manner. AEA's obligation to
repurchase any PPF Loan is subject to AIDEA's conveying title to such documents of a
nature at least equivalent to that transferred by AEA to AIDEA originally. Upon payment of
the purchase price for the repurchase, or upon execution by AEA of a promissory note for
the unpaid repurchase price if the PPF lacks sufficient unencumbered and uncommitted
funds, AIDEA shall endorse over to AEA the PPF Loan and note and assign to AEA
AIDEA's interests and rights under any deed of trust and all other documents securing
payment of the PPF Loan. AIDEA shall also assign or endorse to AEA, AIDEA's interests
under any policy of title insurance or private mortgage insurance, or any policy of hazard,
casualty or fire insurance and endorsements thereof, relating to the PPF Loan, as
appropriate.
e. Nothing in this Agreement precludes AIDEA from rescinding a notice of default.
f. The purchase price for the repurchase of any PPF Loans shall be paid by wire
or immediate transfer.
9. Modification. Assignment. Encumbrance or Transfer. Neither party to this
Agreement shall modify any PPF Loan which is the subject of this Agreement, or assign or
transfer any rights under this Agreement, without the prior express written consent of the
other party, which consent such party shall not be unreasonably withhold. AIDEA shall not
sell or transfer any PPF Loan to a third party unless all the PPF Loans under this
Agreement are transferred to such third party. Upon sale or transfer by AIDEA of all of the
PPF Loans under this Agreement, AEA shall no longer be under any obligation to service
or repurchase the PPF Loans. In the event a PPF Loan is modified or sold without the
PPF Loan Sale Agreement Page-3-
consent of AEA, or AIDEA is otherwise unable to convey title at least as good as that
which it received under the terms of the original purchase agreement described above,
AEA shall be relieved of any further duty to repurchase such PPF Loan.
10. Warranties of AEA. AEA warrants to AIDEA that:
a. AEA has full power, authority and legal right pursuant to AS 42.45.01 0(1); sec.
5, ch. 70, SLA 201 0; and other applicable law to execute and deliver, and to perform and
observe the provisions of this Agreement and to carry out the transactions contemplated
hereby, including, without limitation, to sell and assign the PPF Loans to AIDEA.
b. The execution, delivery and performance of this Agreement by AEA has been
duly authorized by all necessary action.
c. AEA's execution and performance of this agreement are not in violation of any
law or regulation governing AEA.
d. AEA does not have actual knowledge of any fact which would adversely affect
the value of any of the PPF Loans sold to AI DEA under this agreement.
e. All payments made by each borrower identified in Exhibit I to AEA have been
properly applied to the respective PPF Loan.
f. No PPF Loan identified in Exhibit I is in default as of the date of closing.
g. At closing, AEA will deliver a current, accurate schedule of future loan
payments, showing the principal and interest with respect to each PPF Loan identified in
Exhibit I.
11. Warranties of AIDEA. AIDEA warrants to AEA that:
a. AIDEA has full power, authority and legal right pursuant to AS 44.88.080(30);
sec. 5, ch. 70, SLA 201 0; and other applicable law to execute and deliver, and to perform
and observe the provisions of this Agreement and to carry out the transactions
contemplated hereby, including, without limitation, to purchase the PPF Loans from AEA.
b. The execution, delivery and performance of this Agreement by AIDEA has
been duly authorized by all necessary action.
c. AIDEA's execution and performance of this agreement are not in violation of
any law or regulation governing AIDEA.
d. AIDEA is purchasing the PPF Loans as an investment of the revolving fund of
AID EA.
12. Modification. This agreement shall not be modified except in writing signed by and
on behalf of each party.
13. Construction. Whenever possible, each provision of this agreement shall be
interpreted in such manner as to be valid and effective under applicable law.
PPF Loan Sale Agreement Page-4-
14. Survival. The representations and warranties, covenants and agreements of Seller
and Purchaser contained herein shall survive the Closing Date.
15. Waiver. Any waiver of any term, provision or condition of this Agreement must be in
writing to be effective. No such waiver, whether by conduct or otherwise, in any one or
more instances, shall be construed as a further or continuing waiver of any such term,
provision or condition, or of any other term, provision or condition of this Agreement.
16. Captions. Paragraph or other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
17. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Alaska.
18. Assignment. This Agreement and AEA's interest in each PPF Loan, note, deed of
trust or other security document assigned to AIDEA pursuant to this agreement shall not
be assignable by operation of law or otherwise, by AIDEA (or its successors or assigns) to
any person or entity without the prior written consent of AEA. Any purported assignment in
violation of this Section shall be void and of no effect as against AEA. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of AEA, AIDEA
and their respective successors and assigns.
19. Further Assurances. AEA and AIDEA shall each promptly execute and deliver to the
other all further documents or instruments reasonably requested by either of them in order
to effect the intent of this Agreement and to obtain the full benefit of the Agreement.
20. Notices. All notices between the parties shall be in writing and shall be served by
hand delivery. Notice shall be deemed given or made at the time of such service.
All notices to AEA shall be given to it at the following address or such other address as
may be specified by notice given in accordance with the terms hereof:
Alaska Energy Authority
813 West Northern Lights
Anchorage, AK 99503
Attention: Executive Director
All notices to AIDEA shall be given to it at the following address or such other address as
may be specified by notice given in accordance with the terms hereof:
Alaska Industrial Development and Export Authority
813 West Northern Lights
Anchorage, AK 99503
Attention: Executive Director
PPF Loan Sale Agreement Page-5-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
SELLER: ALASKA ENERGY AUTHORITY
By: -------------------------------Steve Haagenson, Executive Director
PURCHASER: ALASKA INDUSTRIAL DEVELOPMENT
AND EXPORT AUTHORITY
By:
Ted Leonard, Executive Director
LIST OF EXHIBITS
Exhibit I -Listing of PPF Loans
PPF Loan Sale Agreement Page-6-
Memorandum of Understanding
This Memorandum of Understanding ("MOU") is entered into this 17th day
of February, 2010, between the Alaska Energy Authority ("AEA") and the Alaska
Industrial Development and Export Authority ("AIDEA").
Recitals
A. The power project fund ("PPF") is established as a separate fund of AEA
under AS 42.45.01 O(a).
B. AEA may make PPF loans for financing various activities related to the
development of energy generation and transmission projects, bulk fuel
storage facilities, waste energy, energy conservation, or alternative energy
facilities, or may make loans to the bulk fuel revolving loan fund for the
purposes described in AS 42.45.250(1).
C. The Renewable Energy Grant Fund was established under AS 42.45.045
to finance certain energy projects in Alaska, with an emphasis on feasible
energy projects that provide a cost benefit to Alaska ratepayers, and
projects that will serve areas in which the average cost of energy exceeds
the average cost of energy in other areas of the state.
D. AEA makes PPF loans available to assist project developers meet their
matching fund obligations under the Renewable Energy Fund Grant
Recommendation Program. By doing so, AEA is able to leverage the
funding available from each program to better promote the development of
cost efficient, renewable energy projects for the benefit of Alaska
ratepayers.
E. The PPF currently has less than $5,000,000 available for serving the
purposes of the fund.
F. AEA desires to sell, and AIDEA desires to purchase, the outstanding PPF
loans identified in the attached Exhibit A.
G. In this MOU, in order to maximize the amount AIDEA would be willing to
pay for the PPF loans identified in Exhibit A and minimize financial risk to
AIDEA from purchasing the PPF loans, AEA agrees to repurchase from
AIDEA any outstanding loan if the borrower has a payment default after
the sale.
H. The outstanding PPF loans identified in Exhibit A have a combined current
balance as of February 9, 2010, of $24,700,732.45, and earn interest at
annual rates that range from 0% to 6.16%.
I. AEA and AIDEA agree that the outstanding loans identified in Exhibit A
have a projected present value as of the closing date (expected to be in
July 201 0) of approximately $20.6 million. This present value is the value
of projected loan payments over the life of the outstanding loans,
discounted at 6.02%, which was AIDEA's return on investments for the
three year period ended September 30, 2009.
J. AEA and AIDEA agree that the sale and purchase of the outstanding PPF
loans identified in Exhibit A at the present value of the loans will both
adequately capitalize the Power Project Fund and provide a reasonable
investment for the revolving fund of AID EA.
K. The sale and purchase of the outstanding PPF loans identified in Exhibit A
will require, among other things, the enactment of legislation approving the
sale and purchase.
L. This MOU is intended to set forth the principal terms and conditions under
which AEA would sell, and AIDEA would purchase, the outstanding PPF
loans identified in Exhibit A. The parties intend that this MOU be
incorporated into legislation to be submitted to the Alaska State
Legislature authorizing the sale and purchase of the loans.
NOW, THEREFORE, in exchange for the mutual promises contained herein and
for other consideration the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
1. AEA agrees to sell, and AIDEA agrees to purchase, the outstanding PPF
loans identified in Exhibit A on the closing date, expected to be in July
2010, for a purchase price equal to the present value as of the closing
date of all PPF loans identified in Exhibit A.
2. In this MOU, the "present value" of a PPF loan means the present value of
all scheduled loan payments on the PPF loan over the entire remaining life
of the PPF loan, using a discount rate of 6.02%.
3. Based upon the definition of .. present value," AIDEA and AEA estimate
that the purchase price of all PPF loans identified in Exhibit A on the
closing date will be approximately $20.6 million.
4. AEA shall repurchase from AIDEA any outstanding PPF loan if the
borrower defaults on payment after the sale. The repurchase price shall
equal the present value of the loan determined on the date of the payment
default by the borrower, less any payments received by AIDEA after the
payment default date. AIDEA may exercise the right to have AEA
repurchase a PPF loan by sending notice to AEA of the payment default.
AEA shall pay AIDEA within 30 days of the notice of payment default from
unencumbered and uncommitted funds in the Power Project Fund. If the
PPF has an inadequate amount of unencumbered and uncommitted funds
to repurchase the PPF loan from AIDEA within 30 days of the notice of
default, AEA shall make payments to AIDEA with unencumbered and
uncommitted funds as they become available in the Power Project Fund
(through repayments from other PPF loans or otherwise), with interest on
the unpaid balance at the annual rate of four percent (4%) from the date
30 days after the notice of default. Nothing in this paragraph precludes
AIDEA from rescinding a notice of default.
WHEREFORE the parties have executed this Agreement as of the
date first written above.
Alaska Energy Authority
oy: Steve Haagenson
Executive Director
Alaska Industrial Development and Export Authority
by: Ted Leonard
Executive Director
Exhibit A
Alaska Energy Authority
Power Project Loans
as o/2/9/10
Payment Outstanding
Period Loan# Loan Name Commitment Current Balance
Annually
40901044 QINARMIUT CORP $0.00 $84,841.03
40901045 CORDOVA ELEC COOP $0.00 $742,857.13
40901047 ST PAUL, CllY OF $0.00 $97,306.42
40901048 WRANGELL, CllY OF $0.00 $78,553.50
40901050 PELICAN UTI LilY DISTRICT $0.00 $15,161.70
40901057 ST PAUL, CllY OF $0.00 $1,260,000.00
Total for Annually $2,278,719.78
SemiAnnually
40901009 SITKA, CllY OF $0.00 $9,178,074.93
40901049 GWITCHYAA ZHEE UTI LilY $0.00 $145,384.29
40901051 AP& T TOK DOT LAKE $0.00 $232,837.77
40901052 AP& T (TETLIN) $0.00 $172,614.56
40901059 AP&T (PRINCE OF WALES PROJECT) $0.00 $893,333.30
40901060 ELFIN COVE, COMMUNilY OF $0.00 $550,325.15
40901061 SOUTHERN ENERGY $0.00 $517,673.38
40901062 YAKUTAT, CllY & BOROUGH OF $0.00 $125,792.95
4090106S AVEC NIGHTMUTE $0.00 $205,283.22
40901068 AP&T (SKAGWAY)DYEA LINE EXTENSim $0.00 $114,153.48
40901071 TUNTUTULIAK COMMUNilY SERVICES A $0.00 $129,509.64
40901072 GUSTAVUS ELECTRIC COMPANY $0.00 $118,626.84
40901076 NAPASKIAK ELEC UTI LilY $0.00 $6,304.97
40901079 TDX SAND POINT GENERATING INC $0.00 $203,984.12
40901080 AK POWER CO-POW SWITHGEAR PROJ. $0.00 $167,889.70
40901081 AK POWER CO-SKAGWAY LINE EXT $0.00 $187,093.47
40901084 AK POWER CO-SOUTH FORK HYDRO $0.00 $1,576,590.23
40901085 ADAK, CllY OF (DOWNSIZE GEN) $0.00 $85,577.88
40901086 TDX NORTH SLOPE GENERATING INC $0.00 $796,539.85
40901090 TDX NORTH SLOPE GENERATING INC $0.00 $746,334.45
40901091 TDX SAND POINT GENERATING INC $0.00 $120,251.45
40901092 AKPOWERCO $0.00 $63,010.57
40901093 PORT HEIDEN, CITY OF $0.00 $38,730.34
40901094 YAKUTAT, CITY & BOROUGH OF $0.00 $224,977.15
40901095 TDX NORTH SLOPEGENERATING, INC $0.00 $1,193,582.30
40901096 CHENA POWER LLC $0.00 $530,138.84
40901097 CRAIG, CllY OF $0.00 $482,653.23
40901100 GUSTAVUS ELECTRIC, INC $0.00 $928,029.76
40901102 CHIGNIK LAGOON POWER UTILilY $0.00 $30,920.85
40901104 ALASKA WIND POWER, LLC $0.00 $143,502.81
40901106 NUSHAGAK ELECTRIC & TELEPHONE CQ( $0.00 $12,010.97
40901107 TDX NORTH SLOPE GENERATING, INC. $0.00 $2,500,000.00
Total for SemiAnnually $22,421,732.45
Grand Total $24,700,452.23
Prepared by AEA
Next Due Interest Payment Maturity
Date Rate Amount Date
10/1/10 0.00 $12,266.17 10/1/16
6/11/10 0.00 $28,571.43 6/11/35
10/1/10 3.00 $8,614.18 10/1/23
7/1/10 2.00 $27,238.92 7/1/12
7/1/10 5.61 $2,191.43 7/1/19
10/1/10 0.00 $90,000.00 10/1/23
$168,882.13
7/1/10 4.00 $307,037.96 1/1/33
7/1/10 6.16 $9,844.52 1/1/20
7/1/10 0.00 $12,254.63 7/1/19
7/1/10 4.20 $11,121.71 7/1/19
7/1/10 0.00 $20,000.00 1/1/37
7/1/10 0.00 $13,102.98 1/1/31
7/1/10 5.60 $21,480.18 7/1/30
7/1/10 3.00 $7,325.59 1/1/20
7/1/10 0.00 $10,804.38 7/1/19
7/1/10 2.00 $6,052.95 7/1/20
7/1/10 0.00 $5,396.23 1/1/22
7/1/10 5.40 $10,288.01 1/1/17
7/1/10 5.80 $1,669.45 1/1/12
7/1/10 4.00 $10,109.49 1/1/23
7/1/10 5.45 $7,639.46 1/1/27
7/1/10 5.45 $6,660.67 1/1/37
7/1/10 5.45 $57,000.66 1/1/36
7/1/10 5.39 $6,648.22 1/1/18
7/1/10 3.00 $34,972.27 1/1/24
7/1/10 5.15 $35,901.66 1/1/25
7/1/10 5.11 $5,454.25 7/1/26
7/1/10 5.11 $2,912.94 1/1/26
7/1/10 5.09 $2,403.24 7/1/20
7/1/10 4.92 $17,225.39 1/1/18
7/1/10 4.92 $53,356.61 7/1/26
7/1/10 5.02 $23,729.86 7/1/26
7/1/10 5.05 $19,908.31 1/1/29
7/1/10 4.69 $29,659.32 7/1/38
7/1/10 4.62 $5,599.19 1/1/13
7/1/10 4.88 $7,176.84 1/1/14
7/1/10 4.99 $4,820.30 1/1/15
7/1/10 5.46 $104,892.75 1/1/30
$872,450.02
ALASKA ENERGY AUTHORITY
RESOLUTION NO. 201 0-03
A RESOLUTION OF THE ALASKA ENERGY AUTHORITY
REGARDING THE SALE OF POWER PROJECT FUND LOANS
BY THE ALASKA ENERGY AUTHORITY TO THE ALASKA
INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY
WHEREAS, the Power Project Fund ("PPF") is established as a separate fund of the
Alaska Energy Authority ("AEA") under AS 42.45.01 O(a); and
WHEREAS, because AEA has no employees, staff of the Alaska Industrial Development
and Export Authority ("AIDEA") currently services loans made from the PPF on behalf of AEA;
and
WHEREAS, AEA can make loans out of the PPF to finance energy generation and
transmission projects, or to fund the bulk fuel revolving loan fund under AS 42.45.250(1); and
WHEREAS, AEA currently uses loans from the PPF as a significant financing tool to
help developers of renewable energy grant fund projects (AS 42.45.045) finance match
requirements, and the legislature expressed its intent that the PPF serve as the main source of
state assistance for energy projects [See, sec. 1 (4), ch. 82, SLA 2010]; and
WHEREAS, the PPF has inadequate amounts without recapitalization to fund all
reasonable loan needs arising out of the renewable energy grant fund and recommendation
program, and to fulfill other purposes of the PPF; and
WHEREAS, AEA and AIDEA entered a Memorandum of Understanding dated February
17, 2010 ("MOU"), and will enter a PPF Loan Sale Agreement anticipated to close on
September 23, 2010, with the intent to recapitalize PPF and provide a reasonable investment
for AIDEA's revolving fund; and
WHEREAS, under the MOU and PPF Loan Sale Agreement, AEA agrees to sell, and
AIDEA agrees to purchase, certain outstanding PPF loans; and
WHEREAS, Exhibit A to the MOU identified PPF loans which could be sold, AEA and
AIDEA agree that the sale should not include any PPF Loan which has a current payment
default on the closing date. Exhibit I to the PPF Loan Sale Agreement will identify the
outstanding PPF loans listed in MOU Exhibit A that are not in payment default on the closing
date. The PPF loans identified in Exhibit I to the PPF Loan Sale Agreement ("PPF Loans") will
be the PPF loans to be purchased under the PPF Loan Sale Agreement; and
WHEREAS, a copy of the MOU (including Exhibit A) and the PPF Loan Sale Agreement
(excluding Exhibit I) are attached; and
WHEREAS, the PPF Loans will be have a purchase price equal to the present value of
the PPF Loans, with the "present value" of a PPF Loan defined to mean the present value of all
scheduled loan payments on the PPF Loan over the entire remaining life of the PPF Loan, using
a discount rate of 6.02%. The estimated present value of all PPF loans identified in Exhibit A of
the MOU as of July 2010, was $20.6 million; and
WHEREAS, under the MOU and PPF Loan Sale Agreement, in order to maximize the
amount paid that will recapitalize the PPF, AEA agrees to repurchase a PPF Loan if a borrower
defaults in payment. If the PPF has an inadequate amount of unencumbered and uncommitted
funds to repurchase the PPF Loan from AIDEA, AEA agrees to make payments to AIDEA on
the repurchase of the PPF Loan with unencumbered and uncommitted funds as they become
available in the PPF (through repayments from other PPF Loans or otherwise), with interest on
the unpaid balance at the annual rate of four percent (4%) starting 30 days after AIDEA gives
AEA notice of default; and
WHEREAS, in order to minimize confusion to PPF borrowers, staff of AIDEA will
continue to service the PPF Loans, but on behalf of both AEA and AIDEA, and will allow PPF
borrowers to continue to make payments payable to AEA. Any payment received payable to
AEA related to a PPF Loan, including insurance proceeds, will be held in trust on behalf of
AIDEA for deposit into an AIDEA account; and
WHEREAS, AEA may sell PPF Loans under AS 44.83.010(1), and AIDEA may purchase
PPF loans as an investment of the revolving fund under AS 44.88.080(3), if the legislature
approves the sale and purchase; and
WHEREAS, under sec. 5, ch. 70, SLA 2010, the legislature approved AEA selling, and
AIDEA purchasing, PPF Loans under the MOU dated February 17, 2010; and
WHEREAS, AEA and AIDEA each desire to complete the sale and purchase of PPF
Loans to be identified in Exhibit I, as provided in the PPF Loan Purchase Agreement,
anticipated to close on September 23, 2010, in order to recapitalize the PPF and provide AIDEA
with a reasonable investment for the revolving fund.
NOW, THEREFORE, BE IT RESOLVED BY THE ALASKA ENERGY
AUTHORITY AS FOLLOWS:
Section 1. AEA's sale of PPF Loans to AIDEA under the PPF Loan Sale
Agreement, anticipated to close on September 23, 2010, is approved. On the Closing Date,
AEA shall sell and assign to AIDEA, and AIDEA shall purchase and assume from AEA, AEA's
rights and interests in the PPF Loans to be identified in Exhibit I to the PPF Loan Sale
AEA Resolution No. 2010-03 Page 2
Agreement, and all notes, deeds of trust, guarantees, and other security documents associated
with the PPF Loans.
Section 2. The purchase price of PPF Loans sold under Section 1 shall equal
the present value as of the closing date of all PPF Loans that are identified in Exhibit I. Under
the PPF Loan Sale Agreement and the MOU, the "present value" of a PPF Loan is defined to
mean the present value of all scheduled loan payments on the PPF Loan over the entire
remaining life of the PPF Loan, using a discount rate of 6.02%.
Section 3. The Executive Director of the Alaska Energy Authority is authorized to
take such actions as may be necessary or convenient to consummate the sale of the PPF
Loans. The Executive Director is authorized to approve non-material changes in the terms and
conditions of the PPF Loan Sale Agreement, as the Executive Director, in his discretion,
determines appropriate.
DATED at Anchorage, Alaska on this 3rd day of September, 2010.
(SeAl)
ATTEST
Secretary ~r-
AEA Resolution No. 201 0-03
YJ -----::=::s. li==---Chair
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