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					Indiana: State Debt
     Overview


              Governor Mitchell E. Daniels

 Office of Management & Budget Director Ryan C. Kitchell

        Public Finance Director Jennifer M. Alvey

                     June 30, 2007
Overview

   I. State Credit Ratings

   II. Outstanding Indiana Agency Debt
       A. State Appropriation-Backed Debt
       B. State-Related Debt (Not backed by State Appropriations)




                                                                     1
I. State Credit Ratings – As of 7/26/07



                                                                                                                                     Vermont
                 Washington                                                                                                        AA+/Aaa/AA+
                 AA/Aa1/AA                                                                                                                          Maine
                                           Montana            North Dakota                                                                           AA/
                                          AA/Aa2/AA-           (Aa2)/(AA)                                                                            Aa3/
         Oregon                                                                Minnesota                                                              AA
        AA-/Aa2/AA                                                             AAA/Aa1/                             West Virginia                         NH
                            Idaho                                                AAA      Wisconsin                                                       AA/Aa2/AA
                          (Aa2)/(AA)                          South Dakota                                          AA-/Aa3/AA-         New York
                                                                (A1)/(AA)                  AA-/Aa3/                                     AA-/Aa3/           MA
                                             Wyoming                                         AA-          Michigan                        AA               AA/Aa2/AA
                                               (AA)                                                        AA-/Aa3/
                                                                                    Iowa                                                              RI AA/Aa3/AA
                                                                                                             AA-                                   CT AA/Aa3/AA
                   Nevada                                        Nebraska      AA+/(Aa1)/(AA+)                                  Pennsylvania
                 AA+/Aa1/AA+                                    (Aa3)/(AA+)                                                      AA/Aa2/AA       NJ AA-/Aa3/AA
                                  Utah                                                                            Ohio
                               AAA/Aaa/AAA                                                     Illinois Indiana AA+/Aa1/                            DE AAA/Aaa/AAA
                                                 Colorado                                    AA/Aa3/AA (Aa1)/      AA+
    California                                   (Aa3)/(AA)
    A+/A1/A+                                                                                             (AA+)                                      MD AAA/Aaa/AAA
                                                                     Kansas          Missouri
                                                                   (Aa2)/(AA+)                                                                      DC A+/A1/A+
                                                                                     AAA/Aaa/                 Kentucky                                 Virginia
                                                                                       AAA                   (Aa2)/(AA-)                             AAA/Aaa/AAA
                               Arizona                                Oklahoma                         Tennessee                                 North Carolina
                               Aa3/(AA)      New Mexico               AA/Aa3/AA      Arkansas         AA+/Aa1/AA+                                AAA/Aaa/AAA
                                              Aa1/AA+                                 Aa2/AA

                                                                                                         Alabama        Georgia             South Carolina
                                                                                                         AA/Aa2/       AAA/Aaa/             AAA/Aaa/AA+
                                                                  Texas              Louisiana              AA           AAA
                                                                AA+/Aa1/AA            A/A2/A
       Alaska
       AA/Aa2/                                                                                                                                   Puerto Rico
         AA                                                                                                                                      Baa3/BBB-
                                                                                                         Mississippi
                                                                                                         AA/Aa3/AA

                                                                                         AAA/Aaa                  Florida
                                        Hawaii                                                                  AA+/Aa1/AAA
                                       AA/Aa2/AA                                         AA/Aa
                                                                                        Less than AA/Aa3
                                                                                        No G.O. or Issuer Rating
  Order of Ratings: Fitch/ Moody’s /S&P
                                                                                  ( ) indicates states with no G.O. debt.
                                                                                        Ratings are hypothetical.
                                                                                                                                                               2
II. Outstanding Indiana Agency Debt – Overview

     State Appropriation-Backed Debt                     State Related Debt
                             Debt              Issuing Entity        Debt Outstanding
    Issuing Entity
                          Outstanding
                                            Health & Educational
 Transportation Finance                                                  $6,928,010,450
                           $1,537,831,775     Facility Authority
       Authority
                                              Indiana Bond Bank
    Public University                                                    $1,918,815,001
                           $1,180,961,058   (Non-Moral Obligation)
    (Fee Replaced)
  State Office Building                     State Revolving Fund         $1,790,382,020
                            $893,425,613
      Commission
                                             Indiana Secondary
  Indiana Bond Bank                         Market for Educational       $1,884,850,000
                            $466,460,000
   (Moral Obligation)                               Loans
 Stadium & Convention                       Housing & Community
                             $611,525,000                                $1,206,925,000
        Center                              Development Authority
     Recreational                              Public University
     Development              $30,715,000                                     $568,118,355
                                            ( Non-Fee Replaced)
     Commission
                                              Port Commission                 $36,987,612
         Total             $4,720,918,446
                                                  State Fair                  $17,455,000
                                                    Total               $14,351,543,438
                                                                                         3
Indiana Finance Authority
    In the 2005 session of the Indiana General Assembly, the Indiana Finance Authority (“IFA”) was
     created to oversee State related debt. The enabling legislation consolidated five previously
     separate entities into the new IFA as shown below

                                    Indiana             Indiana          Indiana         Indiana Health
      State       State Office    Recreational      Transportation     Development        & Educational
    Revolving      Building       Development          Finance           Finance        Facility Finance
      Fund        Commission      Commission           Authority        Authority           Authority




                                     Indiana Finance Authority

    The IFA issues debt on behalf of these five former issuers, and IFA has managed their debt
     portfolios since 2005.
    The IFA also issues debt for the Stadium and Convention Center project
    Entities outside IFA who issue debt backed by possible state appropriations include the Indiana
     Bond Bank (Moral Obligation Debt) and Public Universities (Fee-Replaced Debt).
    The State Public Finance Director by statute manages the IFA and also oversees two additional
     bond issuing entities through statutory board positions including the Indiana Bond Bank and the
     Indiana Housing and Community Development Authority.                                            4
IIA. State Appropriation-Backed Debt

   State Appropriation-Backed debt is approved by the General Assembly either by approval
    of the project or the source of funds used to finance the repayment of bonds issued.
        Moral Obligation debt is reviewed by the Budget Committee and approved by
         the Budget Director.




                                                                                         5
    State Appropriation-Backed Debt:
    Indiana Transportation Finance Authority (ITFA) Projects [now IFA]
    ITFA issued debt in partnership with the Indiana
     Department of Transportation to finance the cost of
     construction, acquisition, reconstruction,                                       Debt
                                                                  Project
     improvement, or extension of the State’s public                               Outstanding
     ways.
                                                             State Highways &
                                                                                  $1,329,131,775
                                                                  Bridges
    Payment is made on Highways and Bridges bonds
     primarily using State-appropriated gas tax dollars,    Airport Maintenance
                                                                                   $200,550,000
     among other resources.                                        Facility
                                                            Aviation Technology
                                                                                     $8,150,000
    The Airport Maintenance Facility was formerly the             Center
     United Maintenance Facility and is currently leased
     to other users.                                               Total          $1,537,831,775


    The Aviation Technology Center is a training center
     run by Vincennes/Purdue cooperative at
     Indianapolis International Airport. It was built in
     connection with the United Maintenance Facility for
     long-term worker training.

    Currently the ITFA portfolio of debt is composed of:
       87% fixed rate debt                                                                      6
       13% variable rate debt
State Appropriation-Backed Debt:
Fee-Replacement Public University Debt


   Fee-replacement bonds are debt           University        Debt Outstanding
    issued by universities, through
    which State-appropriations
                                          Indiana University       $426,924,386
    reimburse the universities for debt
    service.
                                          Purdue University        $274,268,874

   Fee-replacement bonds must be         Ivy Tech College         $210,255,000
    approved by the State Budget
    Committee, Budget Agency, and the        Ball State
                                                                     $77,090,000
    Governor of the State of Indiana.        University
                                            Indiana State
                                                                     $75,695,976
                                              University
                                            University of
                                                                     $74,279,488
                                          Southern Indiana
                                             Vincennes
                                                                     $49,322,333
                                             University

                                                Total             $1,180,961,058


                                                                                   7
    State Appropriation-Backed Debt:
    State Office Building Commission (SOBC) Projects [now IFA]
    The State Office Building
                                                    Project                       Debt Outstanding
     Commission (SOBC)
     issued debt in partnership                Capitol Complex                          $156,550,357
     with multiple entities to                Miami Correctional                        $132,485,000
     finance or refinance the
     cost of acquiring,                   Wabash Valley Correctional                    $122,335,000
     constructing, or equipping             New Castle Correctional                     $117,860,000
     buildings and                           Indiana State Museum                        $77,985,000
     improvements:
                                       Forensic Health and Sciences Lab                  $62,900,000
        Department of
          Administration                    Madison State Hospital                       $57,005,000
        Family and Social                   Rockville Correctional                      $39,560,000
          Services
                                            Pendleton Correctional                       $34,500,000
          Administration
        Department of                     Logansport State Hospital                     $33,995,000
          Corrections                      Evansville State Hospital                     $30,745,000
                                  Senate Av./ Washington St. Parking Facilities          $27,505,256
    Currently the SOBC debt
                                    Project Hoosier Safe-T (Hoosier Notes)                $7,034,000
     portfolio is composed of:
       76% fixed rate debt                 Central Indiana Hospital
                                                                                          $6,118,000
                                               (Hoosier Notes)
       24% variable rate
          debt                                       Total                              $906,577,613
                                                                                                   8
    State Appropriation-Backed Debt:
    Indiana Bond Bank Moral Obligation Debt
    The Indiana Bond Bank (IBB)                            Project                     Debt Outstanding
     provides assistance to local
     government in funding special                 Hendricks County Hospital              $51,990,000
     projects through the use of bonds               Adams County Hospital                $39,555,000
     including:
        Water & Sewer Systems                      South Bend TIF Districts              $35,000,000
        Capital Improvement/                  Hancock County Memorial Hospital           $34,610,000
          Building Projects
                                            Northern IN Commuter Transportation Dist.     $27,630,000
    IBB’s Special Program debt may                Columbus Learning Center               $27,515,000
     form a Moral Obligation (M.O.)            East Chicago Building Facility Corp.       $25,130,000
     with the State of Indiana providing
     the issuing organization with more    Fort Wayne Regional Public Safety Academy      $20,660,000
     favorable financing terms.
                                             Good Samaritan Hospital (Knox County)        $15,870,000
    The State only serves as a              Hendricks County Redevelopment Auth.         $15,675,000
     backstop on M.O. debt if the                     City of Carmel Sewer                $10,780,000
     primary repayment source fails.
     IBB has never had a Moral                      Whiting Sanitary District              $7,130,000
     Obligation claim in its history.
                                                      Town of Burns Harbor                 $7,010,000

    Moral Obligation debt is reviewed             Pittsboro Wastewater Plant              $4,025,000
     by the Budget Committee and                    Other Pooled Issuances                $143,880,000
     approved by the Budget Director.
                                           IBB Special Programs (Moral Obligation)        $466,460,000
                                                                                                         9
    State Appropriation-Backed Debt:
    Indiana Stadium & Convention Center [debt managed by IFA]

    Stadium/Convention Center Construction
                                                     Project        Debt Outstanding
     Financing:
       $400m and $211.5m of bonds were
         issued in 2005 and 2007,               Lucas Oil Stadium         $611,525,000
         respectively, as variable rate debt.
       Interest rates on the Stadium &         Convention Center           $6,348,815
         Convention Center have been fixed        Line of Credit
         through a BMA Swap.
            The Stadium rate is locked at            Total               $617,873,815
              4.231%.
            The Convention Center rate is
              locked at 4.556%.
       Remaining tranches totaling
         approximately $300 million are to be
         issued over the course of the
         projects.
       First-line repayment source is local
         food & beverage, hotel, rental car
         and admission taxes, collections
         from the Professional Sports
         Development Area, and Colts license
         plate fees.                                                                   10
State Appropriation-Backed Debt:
Recreational Development Commission (RDC) Projects [now IFA]


   The Recreational Development                                                Debt
    Commission (RDC) issued debt in                      Project             Outstanding
    partnership with the Department of
    Natural Resources to finance or                Prophetstown & Multi-
                                                                               $13,385,000
    refinance the costs of the acquisition,         Project Refundings
    construction, renovation, improvement or       Clifty Inn / Abe Martin
                                                                               $12,780,000
    equipping of facilities for the operation of            Lodge
    public parks.
                                                   Ft. Benjamin Harrison
                                                                                $4,550,000
                                                        Golf Course
   Payment of RDC bonds is made through
    fees generated by the operation of all                 Total               $30,715,000
    state parks and other fees received
    related to park projects.

   Currently the RDC portfolio of debt is
    100% fixed rate.



                                                                                           11
State Appropriation-Backed Debt:
Outstanding Debt Load (1997 - 2007)




            *Appropriation-Backed debt does not include Public University Fee-Replaced Debt as well as Contingent Obligations     12
           Source: (IN Outstanding Debt Subject to Possible Appropriation) – IN Official Statement Appendix A - Moody’s Medians
State Appropriation-Backed Debt:
Public University Fee-Replaced Debt




                                      13
State Appropriation-Backed Debt:
Debt Service Obligations




                                   14
IIB. State-Related Debt

   Quasi agencies that issue debt, but rely neither on the full faith and credit of the State nor
    on a moral obligation include debt from the following entities:
      Indiana Health and Educational Facility Finance Authority (now IFA)
      Indiana Bond Bank (Non- Moral Obligation Projects)
      State Revolving Fund
      Indiana Secondary Market for Educational Loans
      Indiana Housing and Community Development Authority
      Non-fee Replacement Public University Debt
      State Port Commission
      State Fair Commission




                                                                                                 15
State-Related Debt:
Indiana Health and Educational Facility Finance Authority

   The Indiana Health and Educational Facility Financing Authority (IHEFFA) is the
    resulting authority from the merger of the Indiana Health Facility Finance Authority and
    the Indiana Educational Facilities Authority.

   IHEFFA assists county and nonprofit hospitals, long-term health care providers, and
    private institutions of higher education in financing capital projects.




                           Program              Debt Outstanding

                         Health Care             $6,395,952,673

                           Private                $532,057,777
                      College/University
                             Total               $6,928,010,450




                                                                                               16
State-Related Debt:
Indiana Bond Bank Non-Moral Obligation Debt

   As previously stated, the Indiana Bond             Project          Debt Outstanding
    Bank (IBB) is organized to provide             Taxable School        $1,003,180,000
    assistance to local government in              Severance Bond
    funding special projects through the use          Program
    of bonds including:
                                                   Advance Funding       $727,045,000
       School Pension Funding
                                                      Program
       Tax Anticipation Warrants
                                                 Common School Fund      $165,765,000
       Common School Fund
       Essential Use Equipment                     HELP Program          $37,033,673
                                                 Not-For-Profit Water     $23,076,108
   In addition to Special Program debt that          Program
    may form a Moral Obligation with the         Special Program Non-     $22,825,000
    State of Indiana, IBB issues other non-        Moral Obligation
    Moral Obligation bonds to aid
                                                 Less: Pass Through      ($60,109,780)
    municipalities and subdivisions in
                                                        Debt
    financing local projects.
                                                        Total            $1,918,815,001
   These bonds are repaid solely by
    municipalities and locals, and there is no
    State backstop.                                                                       17
State-Related Debt:
State Revolving Fund Loan Program [now IFA]

   The State Revolving Fund (SRF) Loan
    Programs are set-up to assist local
                                                      Project          Debt Outstanding
    municipalities in financing drinking water
    and waste water infrastructure projects.
                                                  Wastewater Fund         $1,477,143,764
   Currently, U.S. Environmental Protection
                                                 Drinking Water Fund        $259,111,236
    Agency (EPA) grants are leveraged
    through bond issuances to provide
    below-market financing to municipalities       Total SRF Debt         $1,736,255,000
    (at a savings of approx. $33 million to         Outstanding
    local governments in FY 2007).

   Currently, the SRF portfolio is 100% fixed
    rate.




                                                                                          18
State-Related Debt:
Indiana Secondary Market for Educational Loans

   The Indiana Secondary Market for Educational Loans (ISM) is a not-for-profit institution
    that operates in the higher education loan secondary market.

   ISM’s goal is to improve opportunities for students and families to obtain a post-
    secondary education.




                                Project            Debt Outstanding
                           Outstanding Prior        $1,374,850,000
                                Issues
                            Short-Term Debt          $510,000,000
                                 Total              $1,884,850,000




                                                                                               19
State-Related Debt:
Indiana Housing and Community Development Authority (IHCDA)

   The Indiana Housing and Community Development Authority (IHCDA) was formerly
    known as the Indiana Housing Finance Authority.

   IHCDA finances homeownership programs through the issuance of Mortgage Revenue
    Bonds.

   IHCDA affords below-market interest rate loans to low and moderate income first-time
    homebuyers via a network of lenders throughout the State of Indiana.




                                                        Debt
                                Program
                                                     Outstanding
                              Single Family         $1,206,925,000
                                  Total             $1,206,925,000



                                                                                           20
State-Related Debt:
Non-Fee Replacement Public University Debt

                                                  Colleges and
   Non-fee replacement bonds constitutes                             Debt Outstanding
                                                  Universities
    debt issued by universities for which they
    are solely responsible for paying debt       Purdue University         $306,249,126
    service through student fees.
                                                 Indiana University        $140,952,393
   Non-fee replacement bonds must be              University of
                                                                            $41,715,000
    approved by the Director of Office of        Southern Indiana
    Management and Budget, but are not an           Ball State
    obligation of the State.                                                $40,750,147
                                                    University
                                                   Indiana State
                                                                            $20,849,023
                                                     University
                                                    Vincennes
                                                                            $17,602,666
                                                    University

                                                 Ivy Tech College                   $0

                                                       Total               $568,118,355




                                                                                          21
State-Related Debt:
Indiana State Port Commission

   The Indiana State Port Commission             Project         Debt Outstanding
    provides funds for ports and economic
    development initiatives in the State.
                                                Conduit Debt        $36,965,000
                                             Obligation Revenue
   Conduit Debt Obligation Revenue Bonds          Bonds
    are special obligations of the
    Commission payable by a private-sector   Direct Commission        $22,612
    entity.                                      Obligations
                                                   Total            $36,987,612




                                                                                  22
State-Related Debt:
Indiana State Fair Commission

   The Indiana State Fair Commission               Project         Debt Outstanding
    provides funds for the operation and       Outstanding Issues     $17,455,000
    maintenance of State fairgrounds.
                                                     Total            $17,455,000
   State Fair Commission bonds are
    payable solely from, and secured by a
    pledge of, net Fairground revenues after
    payment of expenses.




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