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Vermont Bond Bank tells House committee it can stretch a proposed $9.1 million infrastructure fund by layering loans and credit enhancements
Summary
The Vermont Bond Bank described how its pooled-loan model, federal-state revolving funds and new low‑cost USDA financing can be combined to extend the purchasing power of a proposed $9.1 million Infrastructure Sustainability Fund, offering direct loans, rate buy‑downs or credit enhancement depending on project scale and credit profile.
Michael Gaughn, executive director of the Vermont Bond Bank, told the House Committee on General and Housing on Feb. 4 that the Bond Bank has for decades pooled municipal borrowing to provide lower, state‑grade interest rates to Vermont communities.
“We have facilitated infrastructure finance for Vermont communities,” Gaughn said, describing a pooled‑loan program that lets small towns access near‑state credit ratings through bond issues that are credit‑enhanced by the state.
Why it matters: Committee members asked how a relatively small, proposed Infrastructure Sustainability Fund — $9.1 million in the governor’s proposal — could be made to have more impact. The Bond Bank proposed three deployment tools: direct low‑interest loans to very small or high‑touch projects; supplemental “buy‑down” loans that reduce a pooled loan’s interest rate for a community; and a flexible source of credit enhancement to help unlock larger, investment‑grade financing for transit‑oriented or redevelopment projects.
Gaughn and his staff explained how federal and state programs already flow through or…
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