FNFA’s pooled borrowing approach provides all First Nations in Canada, big or small, remote or urban, with the same borrowing conditions – low rates, long term loans – and flexibility of terms. The scale of FNFA’s operations, the legislative basis, the regulatory oversight regime and the credit enhancement features of the FNFA, such as the debt reserve fund, make it possible to obtain an investment grade credit rating as a government-class bond issuer. This translates into benefits that are passed directly on to FNFA borrowers:
- Ability to attract institutional investors to provide low-rate loans;
- no collateral, lien on assets or deposit required;
- shared transaction costs for the bond issue;
- fixed-rate loans available for budget certainty; and,
- flexibility to set repayment terms to meet budgeted cash flows.