Solid Waste Bonds and Current Lending Activity

Tuesday, October 16, 2007
Contributed by: Alan Rhodes

In 2004 and 2005 Underwood was involved, as issuer's counsel or as borrower's counsel, in a handful of solid waste facility financings. The financings have been developed by W.R. Taylor & Co. Jason Grubbs has been W.R. Taylor's primary representative in our area.

The 2004 and 2005 solid waste projects were in the southwest Texas Panhandle. We've also seen some activity in the Dalhart area.

With higher interest rates and the increasing size of transactions, we're seeing other farmers consider and re-consider using this financing alternative. Underwood's client, the Muleshoe Economic Development Corporation will consider final approval of a Castro County project in the next few weeks.

While transaction costs must be considered, the savings over the life of the project can be significant.

On new construction projects an operator should confirm the costs that might qualify for this tax-exempt financing; I understand that the rule of thumb is, say, 40% of project cost on a new facility. When significant costs are present, the facility owner should consider asking the local governmental entities to pass the authorizing resolutions. These need to be passed prior to or within a few days of pushing dirt for the hard costs to be eligible for this program.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.