Wyo. Code R. 085-0017-9
Effective Date: 08/19/2022 to Current
Rule Type: Current Rules & Regulations
Reference Number: 085.0017.9.08192022
Section 1. Special Requirements. The Large Project Loan Program is funded by a different appropriation fund than the Partnership Challenge Loan Program(s). Therefore, the special requirements are listed below in accordance with the legislation unique to this program.
Section 2. Authority. These rules are promulgated in accordance with the Wyoming Administrative Procedure Act, Wyoming Statute 16-3-101 through 16-3-115 and the Wyoming Business Council's rule-making authority in W.S. 9-12-308(m).
Section 3. Purpose. These rules are intended to provide detailed procedures by which the applicants for large project loans or loan guarantees shall apply for such loans or loan guarantees.
(a) Project application. Applicants seeking a loan or loan guarantee under this program must submit a project application in compliance with this Chapter of these Rules to Council staff. This project application must contain the following comprehensive information:
(i) Tab A - A detailed overview of the applicant's business entity, including identification of all principal management and owners.
(ii) Tab B - A detailed description of the project to be financed, including all costs to be funded and a specific explanation of how the project satisfies the criteria set forth in W.S. 9-12-308(f);
(iii) Tab C - A business plan accurately describing the existing business and its history, future business endeavors, and all characteristics of the project to be funded through the loan or the financing secured by the loan guarantee. The business plan must address, but should not be limited to, the following components:
(A) The total cost of the project, the amount of financing sought and what costs and expenses for the project will be covered by such financing;
(B) The source of the applicant's required private funds, as described in Section 7(h) of this Chapter, to be used in the completion of the project in an amount which is at least twenty-five percent (25%) of the total cost of the project.
(C) The collateral offered to secure the loan or the loan guarantee, including documentation establishing that the collateral is the property of the applicant and is unencumbered with any other financing or an indication that any such financing will be paid off with proceeds from the loan or the financing obtained in connection with the loan guarantee;
(D) The proposed term of financing, including loan amount, term of the loan, amortization, interest rate, and/or private bank participation; and
(E) Any other information reasonably necessary to inform the Wyoming Business Council staff about the project to be financed, the nature of which may vary depending upon the type of business and facilities at issue;
(iv) Tab D - A comprehensive chart and detailed description identifying all business entities related to the applicant, whether by contract or through corporate affiliations;
(v) Tab E – The applicant’s financial records for five (5) years or the life of the applicant, whichever is less, including tax returns;
(vi) Tab F - A balance sheet and projected cash flow for the project for the anticipated term of the loan or loan guarantee evidencing the applicant’s ability to repay the loan or the financing guaranteed by the loan guarantee on or prior to maturity;
(vii) Tab G - Existing short-term and long-term financing for property associated with the project to be financed through the loan or loan guarantee;
(x) Tab H - Records concerning the environmental compliance with the applicable environmental regulations of facilities and underlying real property associated with the project and completion of an environmental questionnaire provided by the Wyoming Business Council staff with regards to such property which will serve as collateral. If the environmental questionnaire indicates any environmental problems with the property, then further due diligence may be required, such as a Phase 1 and possibly Phase 2 environmental report;
(xi) Tab I - Notice and identification of any threatened or pending litigation involving the anticipated project or property offered as collateral and/or the applicant (or such entity that will be the borrower) and any guarantor as provided in Section 7(j) below;
(xii) Tab J - Industry-specific information and documentation concerning the applicant’s business activities within that industry, including without limitation, regulatory information related to the project to be undertaken; and
(xiii) Tab K - Any relevant ongoing or new information that arises any time after applicant’s initial submission of the above information which may influence or bear upon the review of the proposed loan or loan guarantee, including without limitation, new or altered financing arrangements, statutory, rule or regulatory changes which may impact applicant’s project or operations or the proposal thereof, or changes in ownership.
(b) Additional information. In addition to information in the project application, the Wyoming Business Council staff may ask for additional information necessary for the Wyoming Business Council staff to conduct its due diligence and review of the project. Applicants shall respond to such requests in a timely manner with complete and current information. Any documents, materials or information provided to Council staff in connection with its review of the loan or loan guarantee may be shared with any other State agency, including without limitation, the Governor’s Office, the Wyoming State Treasurer’s Office, and the Wyoming Attorney General’s Office. Applicant shall also provide updated information pertinent to the comprehensive information required in Section 4(a)(i)–(xiii) of this Chapter should any of that information change at any point during the application process.
(c) Collateral. Based on the appraisals and information provided by the applicant for the collateral securing the loan or loan guarantee, Council staff shall determine if such collateral is adequate based on the requirements of W.S. 9-12-308. Council staff shall secure a first security interest in the entire project which is the subject of the financing and must approve any subsequent financing which is to exist at the time of closing or which applicant enters into after closing of the loan or loan guarantee. If the applicant shows good cause why the applicant cannot grant the State a first security interest in the entire project, then the applicant must propose substitute collateral which Council staff deems to be sufficient to repay the loan or loan guarantee in the case of a default and in which the Council’s interest is before the interest of any and all other lenders in such substitute collateral (if such other lenders have been previously approved by the Council as provided in Section 7(b) of this Chapter).
(d) Value of collateral. Loans or loan guarantees shall be adequately collateralized, such that Council staff may obtain appraisals to assess the value of existing facilities, collateral, and other real or personal property used as collateral.
(i) LTV Table
| Loan Category | Loan-to-Value Limit (percent) |
|---|---|
| Raw Land | 65 |
| Land Development | 75 |
| Construction | 75 |
| Commercial, Multifamily, and other non-residential | 80 |
|---|---|
| 1- to 4-family residential | 85 |
| Improved Property | 85 |
| Equipment | 80 |
(e) Fee and Experts. The Council shall charge the applicant a loan origination fee or loan guarantee fee in the amount of one percent (1%) of the total loan or guaranteed loan amount. This fee shall be used to pay for the costs of any experts hired by Council staff to aid in conducting the due diligence of the project, including, without limitation, appraisers, accountants, environmental engineers and attorneys. If the cost of such experts exceeds the amount of the origination or guarantee fee, then the applicant shall pay any such excess costs. Regardless whether the applicant closes on the loan or loan guarantee, the applicant shall pay for, or reimburse the State for, all costs incurred by the Council to review the project and the loan or loan guarantee and to conduct the due diligence necessary for such review, including, without limitation, the costs of such experts.
(a) Steps of process. The steps necessary to obtain approval of a loan or loan guarantee under the large project program are as follows:
(i) The applicant shall first submit five (5) copies of the complete project application to Council staff, including materials required by Council staff in addition to those items described in Section 4(a) of this Chapter for review.
(ii) After receiving an application, Council staff shall review the project application to ensure completeness under Section 4(a) of this Chapter. Once Council staff ascertain that a submitted application is complete, Council staff shall deliver one (1) copy each of the project application to the Governor or his designee, to the State Treasurer or his designee and to the Wyoming Attorney General's Office. The remaining two (2) copies shall be retained at the Council's main office.
(iii) Council staff shall next review the project application under the process set forth in W.S. 9-12-601 through W.S. 9-12-603. Within sixty (60) calendar days of receipt of a complete application, Council staff and participants (if applicable) shall present the project, the proposed loan or loan guarantee, and its terms to the Loan Review Committee. The Loan Review Committee shall adopt a recommendation and may accept or deny the proposed loan or amend its terms in that recommendation.
(iv) Council staff shall provide electronic notice to all Wyoming financial institutions of the recommended loan terms and shall allow not less than fifteen (15) businessdays to respond with expressions of interest relating to participation. If multiple financial institutions express interest in participating in the proposed loan, council staff shall share proposed terms with the applicant. The applicant shall choose from the provided proposals, and Council staff shall notify the interested financial institutions of the applicant’s choice for participation.
(v) Following the favorable recommendation of the Loan Review Committee, the project shall be submitted to the Board of Directors for a vote to accept or reject that recommendation at the next scheduled Board of Directors meeting.
(vi) Upon the recommendation by the Board of Directors, the Wyoming Business Council shall forward its recommendation to the Wyoming State Loan and Investment Board at the next available meeting for its final approval, or rejection, of the loan or loan guarantee.
(vii) If the Wyoming State Loan and Investment Board grants final approval of the application, the application shall return to Council staff to close the loan or loan guarantee in conjunction with participating financial institution(s), if applicable.
(b) Information review. Nothing in these rules shall be interpreted to prevent the Governor or his designee, the State Treasurer or his designee, the Council, the Loan Review Committee or the Wyoming State Loan and Investment Board from evaluating or reviewing any and all other relevant information when that information is available.
(c) Final agency action is subject to judicial review of administrative action under Wyoming Statute Ann. 16-3-114 and Rule 12 of the Wyoming Rules of Appellate Procedure.
(d) Material change or new information. After the Wyoming State Loan and Investment Board’s final approval of the loan or loan guarantee, the Wyoming Business Council staff may request from the applicant any materials or information the Wyoming Business Council staff deems necessary to close the loan or loan guarantee. If, after the Wyoming State Loan and Investment Board’s final approval of the loan or loan guarantee, new information is revealed that Council staff reasonably determines should have been provided, or Council staff determines that previously provided material information is no longer accurate or sufficient, the Council shall not allow the loan or loan guarantee to proceed to closing, and the applicant shall be required to reapply under Section 5(a) above if the applicant desires to proceed with the loan or loan guarantee.
(e) Attorney General’s opinion. No loan or loan guarantee shall be made until Attorney General’s Office provides a written opinion certifying the legality of the transaction and all documents connected therewith, including without limitation, the Financing Agreement and the Mortgage or any other document which creates a security interest in the applicant's property in favor of the Council.
(f) Closing. The applicant is required to close the loan or loan guarantee with Council staff within twelve (12) months of the final approval of the Wyoming State Loan and Investment Board. The applicant may request an extension of the closing deadline in writing and shall demonstrate good cause why the deadline should not apply and why a new deadline should be set. The Board of Directors may agree to extend the closing deadline, but in no event shall the Council provide an extension which would allow the loan or loan guarantee to close more than two (2) years after the final approval of the Wyoming State Loan and Investment Board without resubmitting the request for the loan or the loan guarantee. If greater than two (2) years has passed or would pass between the date of final approval and the closing, the applicant shall resubmit the application for approval.
(a) Eligible projects and expenses. Eligible projects shall consist of an applicant's prospectively planned and well-defined business endeavor, and the project shall have a set beginning and completion date. A loan or loan guarantee issued pursuant to this Chapter shall not be used to fund past business or past construction expenditures. Expenses eligible for reimbursement from loan proceeds following execution of applicable loan or loan guarantee documents shall relate back no earlier than the submission of the request for the loan or loan guarantee to Council staff. Financing issued under this Chapter shall not primarily serve as a refinance mechanism or otherwise serve to substitute the loan or loan guarantee for an applicant's current lenders.
(b) Examples of eligible projects. The following economic development projects, to the extent they otherwise satisfy the criteria set forth in W.S. 9-12-308 and these rules, may be eligible for large project fund financing:
(i) Scientific testing including, but not limited to, medical, clinical or engineering testing services; (ii) Utilities; (x) Facilities associated with the management of waste; and (xi) Other activities that represent a new technology or type of economic enterprise.
(c) Large project. All loans and loan guarantees issued under this large project program must meet the requirements of a large project as described in W.S. 9-12-308(b). In addition, for a loan or loan guarantee to be eligible for the large project program, project costs must exceed $5,000,000. If the character, scope or size of the project changes at any time after its approval by the Wyoming State Loan and Investment Board, the project shall be resubmitted for approval as revised or modified.
(d) Non-disclosed litigation or threats of litigation. A request for a loan or loan guarantee made under this Chapter shall be ineligible if pending litigation or threats of litigation are not disclosed with the project application or immediately thereafter.
(e) Twelve-Month deadline. A submission shall become ineligible for a loan or loan guarantee under this Chapter if the applicant is unable to close, or if the applicant is unable to obtain a written extension from the Board of Directors, on all loan or loan guarantee documents with the Council within the twelve (12) month closing deadline set forth in Section 5(f) of this Chapter.
(a) Interest rate. The interest rate for any loan under this program shall be consistent with Wall Street Journal Prime (WSJP) as of the date of the application with a floor of WSJP minus one percent (1%) and a ceiling of WSJP plus seven percent (7%). The interest rate shall be proposed by Council staff to the loan review committee for approval, and State Land and Investment Board for approval, after considering applicable risk factors and the economic impact of the project.
(b) Subordinate financing. The loan or loan guarantee documents shall require that the State maintain a first priority lien on all collateral, and no collateral securing the loan or loan guarantee may be used to obtain subordinate financing without the written consent of the Council.
(c) Insurance requirements. Insurance requirements shall vary based on the type of project which is the subject of the loan or loan guarantee but, at a minimum, general liability and property insurance shall be required in amounts and with terms that are acceptable Council staff naming the State as a lien holder. At the discretion of Council staff, other types of insurance may be required based on the type of project being financed and/or the property that serves as collateral for the loan or loan guarantee, such as business interruption, flood, earthquake, or other insurance class as applicable.
(d) Financial covenants. Council staff may require that the loan or loan guarantee documents include financial covenants with which the applicant must comply for the term of the loan or loan guarantee. Such covenants may include standards relating to debt service coverage, debt limitations, net worth, leverage, interest coverage or any other financial metrics determined by Council staff necessary to ensure the strength and performance of the applicant.
(e) Acceleration upon closure of Wyoming facility or applicant's relocation outside the State. The loan documents may provide that, if the applicant closes the facility or operation that is the subject of the loan or loan guarantee or relocate such facility or operation outside the State of Wyoming prior to maturity of the loan or the applicant's actions indicate that applicant intends to so close or relocate the facility or operation, the outstanding balance of the loan shall be immediately due and payable including all interest accrued to the date of such payment and any and all fees and expenses due and owing. If the State has guaranteed financing pursuant to this Chapter, the guarantee documents shall provide that the guarantee shall terminate immediately and irrevocably as of the decision to close, or relocate the facility or operation or the commencement of any actions indicating a future closure or relocation.
(f) Commencement of project. The loan documents shall require that the applicant commence construction of the project within one (1) year after closing of the loan or loan guarantee. If the applicant fails to commence construction within that time, the outstanding balance of the loan shall become immediately due and payable, including all interest accrued to the date of such payment and any and all fees and expenses due and owing. If the State has guaranteed financing pursuant to this Chapter, the guarantee documents shall provide that the guarantee shall terminate immediately and irrevocably after one (1) year if construction of the project has not commenced.
(g) Other covenants. Council staff may include terms in the documents for the loan or loan guarantee to protect the State's interest, such as:
(iv) Corporate approval rights;
(v) Acceleration rights for facility closure, failure to meet job creation and tax base requirements and failure to continue to satisfy any requirements necessary to qualify for eligibility for the large project program; and (vi) Other mechanisms Council staff deems appropriate.
(h) Private funds. Prior to closing a loan or loan guarantee, an applicant must certify to Council staff that the applicant has committed private funds from funding sources not provided by the state of Wyoming in an amount which is at least twenty-five percent (25%) of the total cost of the project and that such private funds may be spent on eligible project costs which may include, but are not limited to, buildings, equipment, and direct project infrastructure. Council staff may require additional information, documentation, escrow of funds, implementation of processes and procedures or any other reasonable materials or terms, to evidence this commitment of private funds.
(j) Guarantees by affiliates. Council staff may determine that, upon examination and review of applicant's due diligence materials and the proposed collateral for the loan or loan guarantee, additional collateral in the form of loan guarantees from affiliates of the applicant may be necessary to provide sufficient security to the State for repayment of the loan or loan guarantee.
(a) Subsequent requirements. Council staff shall continue to monitor the loan or loan guarantee after the closing. The documents shall contain periodic reporting and compliance requirements that the applicant shall be required to satisfy. Each recipient shall provide to Council staff an annual progress report updating the status of the project being financed by the loan or loan guarantee. These reporting and compliance requirements may additionally include, but are not limited to:
(i) An as-built survey;
(ii) Notification of other debt(s);
(iii) Annual financial statements;
(iv) Copies of tax returns;
(v) A report of the number and types of jobs created due to the project financed under this Chapter;
(vi) Property valuation of the project for property tax purposes; and
(vii) Notice of any regulatory violations.
(b) Subsequent disbursements. Loan proceeds will be disbursed only after project expenses have been incurred and/or documented. Each recipient shall provide a disbursement request to Council staff prior to closing for loan proceeds to be disbursed at closing, and loan proceeds shall be disbursed only for expenses related to the project and incurred and/or documented after the date applicant first submitted the project to Council staff for preliminary recommendations. Any loan proceeds which are not disbursed on the day of closing will be held by the Council until applicant submits a disbursement request and proof of eligible expenses as shall be provided in the loan documents and approved by Council staff.
Section 9. Confidentiality. Information and any other documentation submitted in support of a request for a loan or loan guarantee pursuant to the large project program, once submitted to a State agency or official, shall be governed by the Public Records Act, W.S. 16-4-201 through 205, as amended. Upon receipt of a request to disclose an application for a loan or loan guarantee or supporting information, the Council shall make a determination as to whether the information must be disclosed pursuant to that Act. The Council, before it makes said determination or discloses an applicant's information, shall inform the applicant of its determination. Should the applicant object to the disclosure of any record the Council has determined must be disclosed under the Act, the applicant shall justify its request to withhold records under the Act or any other authority to the Council in writing. The Council shall not disclose said information if disclosure is likely to result in the impairment of the government's future ability to obtain necessary information and/or result in substantial harm to the competitive position of the recipient that provided the information to the Council.