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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 6 – Bonded Indebtedness
Demand Bonds

Demand bonds allow investors to redeem principal plus accrued interest prior to maturity (usually on short notice). Each year, disclose the following items for demand bonds:

  • General description of the demand bond program
  • Terms of any letters of credit or standby liquidity agreements — or that none exist
  • Counterparties and related fee structures including commitment fees to obtain letters of credit
  • Amounts drawn on the letters of credit as of the balance sheet date
  • A description of the take out agreement (including the expiration date, commitment fees to obtain the agreement and the terms of any new obligation under the take out agreement)
  • Debt service requirements as if the take out agreement is exercised at fiscal year-end (If the take out agreement has already been exercised — disclose in Note 6 and provide actual debt service for the bonds)