MATCH Program

Qualifying Requirements

The MATCH program is designed to encourage and attract financially strong companies to North Dakota. The program is targeted to manufacturing, processing and value-added industries.

Through this program, Bank of North Dakota (BND) participates in loans to financially strong companies and provide interest rates that are among the lowest in the nation.

Borrower - The primary candidates for this program are businesses that create new wealth for the state and provide new jobs outside of the retail sector. These companies also shall provide evidence of considerable financial strength, as demonstrated by a long-term credit rating in the “Investment Grade” category from a national rating agency.  Investment Grade for purposes of this program is defined as having a long-term rating of “BBB” or stronger. The rate of interest will be determined based upon the rating as described below.

The Borrower may also access the program by:

• Pledge of a certificate of deposit or marketable securities of a quality and level acceptable to BND
• Securing a full guarantee of BND’s portion of the loan from a federal guaranty agency or a company with a qualifying long term credit rating
• Substitution of a credit enhancement (letter of credit for example) from a financial institution which provides the equivalent of an Investment Grade rating.  
• Substitution of a credit enhancement (letter of credit for example) from a financial institution backed by the pledge of  Fed book entry securities
• Substitution of a credit enhancement (letter of credit for example) from a financial institution with an established fed funds line with BND.  The enhancement may not exceed 50% of the fed funds line available at BND for the institution.

The enhancement must provide 100% coverage for Bank of North Dakota's portion of the loan.
The Borrower’s rate of interest will increase to the market rate in the event:

• The Borrower's rating is down-graded below “BBB”.
• The credit rating of the financial institution providing a credit enhancement is down-graded below “BBB” or their funds line is reduced or canceled by BND, and the institution is unable to pledge securities to collateralize their letter of credit.

Use of Proceeds - Loan funds may be used to finance real estate, equipment, and to purchase or lease equipment.

Collateral - To secure the loan, BND requires first lien position on real estate, equipment and other security as may be appropriate. A corporate guaranty may be necessary, if the borrower is a subsidiary and cannot meet the financial strength requirements on a stand-alone basis.

Application Process

Application by a lead lender is required for BND's participation. See application for additional documentation required when submitting a request to BND. The lead lender is responsible for servicing the loan.

Interest Rate

The interest rate on BND's portion of the loan shall be determined based upon the strength of the Borrower’s credit rating or the rating equivalent provided by the credit enhancement. 

Long-Term Credit Rating	BND Loan Participation Pricing
"A" rated or better	1 to 5 year US Treasury Yield Rate plus .25%
“BBB+” or “BBB”	1 to 5 year US Treasury Yield Rate plus .50%
LOC enhancement tied to  BND fed funds	1 to 5 year US Treasury Yield Rate plus .50% to.75%

The interest rate may be adjusted periodically throughout the term of the loan depending upon the conditions of the MATCH funding and the ability of the borrower to maintain its long-term credit rating. The originating lender may add a service fee.

Repayment Terms

The term of the loan will vary depending on the loan purpose with a maximum of 15 years. The interest rate may reset at 1 to 5 year re-pricing windows consistent with the loan pricing options described above, and may be subject to a prepayment penalty satisfactory to BND.

Fees

The lead financial institution may charge an origination fee of up to 1% of the total loan amount that is shared with BND.

For more information please contact us at:

Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5777
1-800-472-2166 ext. 5777
TDD (Telephone Device for the Deaf) 1-800-643-3916