Bond Repayment

Loan Term

The term of each loan is determined by the participating municipality. However, the term can not exceed the useful life of the asset(s) financed. Based on the type of bond, terms can range from five to thirty years as allowed by Vermont State statutes. A municipality cannot prepay a bond early or change the payment schedule once a bond has been sold. The only time a payment schedule could change is if VMBB refunds bonds.

Payment Due Dates

Payments are due fifteen calendar days prior to the bond payment dates of December 1st and June 1st. Payments may be made by check, ACH transfer, or by bank wire. Instructions for each payment type are included with the invoice sent to each municipality in advance of each payment. Failure to receive an invoice does not absolve the municipality from making a scheduled payment in a timely manner.

Principal and Interest Payments

Principal payments start in the year following the year of the bond issue and are included in the December 1st payment. Interest payments are due prior to June 1st and December 1st of each year and start with the December 1st or June 1st next succeeding the bond issue.

Principal payments may be delayed for up to five years but during that time, interest will still be due. The number of years principal is delayed does not extend the maximum term allowed. For example: Repayment of principal on a 20-year loan is delayed for five-years. After the fifth year, principal payments are amortized over the remaining 15 years.

Principal payments for non-revenue projects are limited to level or declining amounts and must be made in annual increments of $5,000.  However, water supply and wastewater projects may be structured with level debt service.

Revenue projects can have level debt service with increasing principal payments.