Commercial Paper

Interim and Variable Rate Financing

Since its introduction in 2005, many of Virginia’s most astute localities have found our Commercial Paper program to be a real cost saver in financing new construction. Rather than financing an entire project before it starts—and paying interest on the full amount beginning on Day One—our flexible loan programs enable a locality to borrow just the amount it needs on an estimated monthly schedule. Arbitrage compliance is generally a non-issue because you are never forced to borrow more than the amount you need to cover current project costs.

Throughout the program’s history, our monthly interest rates have been set at levels considerably less than long-term bond rates. [How low are current interest rates? Check out the Rates & Yields tab on this website.] Over the past 25 years, Commercial Paper rates have been 2.0-3.0% lower on average than long-term bond rates.

And now, we offer even greater peace of mind. With VML/VACo Finance’s Fixed Rate Loan Program, you can start out with a monthly interest rate and have the ability to lock-in a fixed interest rate at any time during the remaining term of your loan.

VML/VACo Finance’s Commercial Paper program offers:

  • Interest rates that are historically 2.0-3.0% lower on average than long-term bond rates;
  • No upfront program fees — your only closing cost is for bond counsel’s opinion;
  • Project financing for terms from a few months up to 20 years;
  • Opportunity to share costs with other participants;
  • Flexibility in scheduling a closing date that best suits your schedule;
  • Minimum loan size generally $500,000; no maximum (Participants have financed as much as $75 million);
  • An ongoing source of financing to use for various projects and/or cash flow requirements throughout the year.

For more information, or to submit an application, select the following links: