Lakes Country Service Cooperative

1001 E. Mount Faith, Fergus Falls, MN 56537 - 218-739-3273

Together We Achieve

MNTAAB Provides Cost-Effective Cash-Flow Borrowing Option

MN TAABIn 1993, the Minnesota School Boards Association, in cooperation with the regional service cooperatives, created the Minnesota Tax and Aid Anticipation Bonds (MNTAAB) statewide cash-flow borrowing pool. The idea was to provide a cost-effective and administrative friendly alternative to stand-alone cash-flow borrowing. The program was designed to create economies of scale for Minnesota school districts and result in a lower AIC (All Inclusive Costs) for cash flow borrowing.  MNTAAB has been successful in this regard by keeping up-front costs reasonable and by selling competitively in the bond market with a large, pooled issue. In the vast majority of cases, this strategy resulted in districts paying lower interest rates.

In a recent survey, Minnesota superintendents and business managers were asked to rate their experience with the MNTAAB cash-flow borrowing pool.  Over 92% of these individuals rated their overall experience with the pool at Excellent or Above Average.  The top three reasons superintendents and business managers listed for their participation in the MNTAAB pool included:

  • Lower Interest Rates
  • Lower Issuance Costs
  • Ease of Administration

MSBA and the Service Cooperatives are proud of their sponsorship of MNTAAB, which clearly has benefited Minnesota school districts.  The pool has demonstrated over time that most school districts have been able to borrow less to achieve their net cash-flow target, pay lower interest costs on the debt, realize a lower net cost per day for cash-flow borrowing, and process the transaction with less administrative time.  In addition, the MNTAAB pool provides a convenient Guaranteed Investment Contract (GIC) option, which is 100% collateralized, convenient and safe.  When you are planning for cash flow borrowing, remember that focusing on issuance costs alone tells only part of the story.  When you calculate the All Inclusive Costs (AIC) of the transaction, MNTAAB has consistently been the best value for cash flow borrowing for the vast majority of Minnesota school districts.

Client representatives from Springsted are also prepared to assist school clients to execute individual cash flow borrowing transactions if there are unique circumstances that make that option more desirable.  For more information about the MNTAAB statewide cash-flow borrowing pool or other cash flow borrowing needs, please contact one of the following client representatives at Springsted. 
 
 
 
 
 

DeeDee Kahring at dkahring@springsted.com
Don Lifto at dlifto@springsted.com
Jim Schmitt at jschmitt@springsted.com

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