Comptroller report: 300 IDB debt issues statewide; Memphis EDGE 2017d bond series reported in default

Steve Osborne, assistant director for local government finance in the Comptroller of the Treasury’s office, presented the fiscal-year 2024 annual report on industrial development board (IDB) debt and a separate notice of default by the Memphis EDGE.

Osborne said the FY24 IDB report — the sixth annual IDB debt report from the Comptroller’s Office — showed that 94 of the 95 counties have active IDBs, with 300 total debt issues: 208 conduit debt issues (debt repaid by another party) and 92 direct debt issues (debt to be repaid by the IDB). Osborne said Nashville’s IDB remained the largest issuer with 65 total bonds and about $811,000,000 in outstanding debt, the majority conduit debt.

“This report shows as of the end of fiscal year 20 24 that there are 94 of the 95 counties that have active IDBs,” Osborne said while summarizing the report to the board.

Separately, the Comptroller’s office reported a monetary notice of default on the Memphis EDGE series 2017d Graceland bonds. The office said available funds were insufficient to make scheduled principal and interest payments of $465,000 and $167,000, respectively, for that series. The trustee later reported having defaulted interest and principal in full on the 2017a and 2017b series; the 2017c series has received partial default payments, and the 2017d series had not commenced repayment at the time of the report. Osborne said bond counsel and the master trustee expected to use reserves from the 2017a and 2017b series before making payments on other series.

Both items were presented as nonvoting reports; board members had no formal action on the items during the meeting.

The Comptroller’s annual IDB report is filed by the Comptroller of the Treasury’s local government finance office and is intended to compile active IDB debt and disclosure across the state; the board did not take formal action on the report during the meeting.