Loan Term

The term of each loan is determined by the participating municipality. However, the term cannot exceed the useful life of the asset(s) financed. Based on the type of bond, terms can range from five to thirty years as allowed by Vermont State statutes. A municipality cannot prepay a bond or change the payment schedule once a bond has been sold. The only time a payment schedule can be changed is if VMBB refunds a bond series.

Payment Due Dates

Payments may be made by check, ACH transfer, or by bank wire. Instructions for each payment type are included with the notice sent to each municipality in advance of each payment. Failure to receive a notice does not absolve the municipality from making a scheduled payment in a timely manner.

Principal and Interest Payments

Principal payments usually start in the year following the year of the bond issue and are included in the November 15th payment. Interest payments are due prior to May 15th and November 15th of each year.

Principal payments may be delayed for up to five years but during that time, interest will still be due. The number of years principal is delayed does not extend the maximum term allowed.

For example: Repayment of principal on a 20-year loan is delayed for five years. After the fifth year, principal payments are amortized over the remaining 15 years.

Principal payments for non-revenue projects are limited to level or declining amount. Utility projects and other revenue projects can have level debt service with increasing principal payments.