State Funding Board's Guidelines on Interest Rate and Forward Purchase Agreements

Pursuant to TCA 9-21-130, the Guidelines were last revised effective August 1, 2002. On August 5, 2009, the State Funding Board accepted a revision to the Guidelines that I had proposed and sought public comment before adopting the update.

Click here to review the comments received. I made changes to the proposed Guidelines in response to those comments.

On Tuesday, October 20, 2009, I presented the proposed Guidelines to the Board for final approval. The Board approved the Guidelines and provided for transition from the 2002 version of the Guidelines.

In summary, the proposed Guidelines now:

  • Require adoption of debt management and derivative policies
  • Require financial statements with a clean audit opinion
  • Require independence of advisors and counsel
  • Require avoidance of conflicts among third party professionals involved in the transactions
  • Specify staff and required knowledge
  • Impose ongoing reporting for Interest Rate and Forward Purchase Agreement transactions

Additionally, as Comptroller I am continuing to ask for public comment concerning the development of model debt and derivative management policies for local governments. In particular I am asking for comments on the role and appropriate amount of variable rate financing. If you have comments or questions, you may e-mail or contact Ann Butterworth, Assistant to the Comptroller for Public Finance, at (615) 401-7910.

Links to Prior Guidelines

Guidelines for Interest Rate and Forward Purchase Agreements
effective 8-1-02

Interest rate Agreement Information Sheet & Forward Purchase Agreement Information Sheet
dated 8-1-02

Guideline Legislation

Educational Requirements Under Guidelines