【正文】 uthorities. Syndicators for investment such as real estate investment trusts (REITs) as well as domestic and foreign pension funds represent relatively new entries to the financial market for building mortgage money. Public projects may be funded by tax receipts, general revenue bonds, or special bonds with ine dedicated to the specified facilities. General revenue bonds would be repaid from general taxes or other revenue sources, while special bonds would be redeemed either by special taxes or user fees collected for the project. Grants from higher levels of government are also an important source of funds for state, county, city or other local agencies. Despite the different sources of borrowed funds, there is a rough equivalence in the actual cost of borrowing money for particular types of projects. Because lenders can participate in many different financial markets, they tend to switch towards loans that return the highest yield for a particular level of risk. As a result, borrowed funds that can be obtained from different sources tend to have very similar costs, including interest charges and issuing costs. As a general principle, however, the costs of funds for construction will vary inversely with the risk of a loan. Lenders usually require security for a loan represented by a tangible asset. If for some reason the borrower cannot repay a loan, then the borrower can take possession of the loan security. To the extent that an asset used as security is of uncertain value, then the lender will demand a greater return and higher interest payments. Loans made for projects under construction represent considerable risk to a financial institution. If a lender acquires an unfinished facility, then it faces the difficult task of reassembling the project team. Moreover, a default on a facility may result if a problem occurs such as foundation problems or anticipated unprofitability of the future facility. As a result of these uncertainties, construction lending for unfinished facilities mands a premium interest charge of several percent pared to mortgage lending for pleted facilities. Financing plans will typically include a reserve amount to cover unforeseen expenses, cost increases or cash flow problems. This reserve can be represented by a special reserve or a contingency amount in the project budget. In the simplest case, this reserve might represent a borrowing agreement with a financial institution to establish a line of credit in case of need. For publicly traded bonds, specific reserve funds administered by a third party may be established. The cost of these reserve funds is the difference between the interest paid to bondholders and the interest received on the reserve funds plus any administrative costs. Finally, arranging financing may involve a lengthy period of negotiation and review. Particularly for publicly traded bond financing, specific legal requirements in the issue must be met. A typical seven month schedule to issue revenue bonds would include the various steps outlined in Table 71. In many cases, the speed in which funds may be obtained will determine a project39。s financing mechanism. TABLE 71Weeks 04 Weeks 2023 Construction loan and long term mortgage: In this plan, a loan is obtained from a bank or other financial institution to finance the cost of construction. Once the building is plete, a variety of institutions may be approached to supply mortgage or long term funding for the building. This financing plan would involve both short and long term borrowing, and the two periods might involve different lenders. The long term funding would have greater security since the building would then be plete. As a result, more organizations might be interested in providing funds (including pension funds) and the interest charge might be lower. Also, this basic financing plan might be supplemented by other sources such as corporate retained earnings or assistance from a local development agency. Investment from retained corporate earnings。 or I1 = (10%)( million) = $ millionYear 2: Cash Flow Illustration of Three Alternative Financing Plans (in $ millions)YearSourceRetained EarningsBank LoanCoupon Bond0011122231920[APV]15%PrincipalIssuing CostEarned InterestContractor PaymentLoan RepaymentEarned InterestContractor PaymentLoan RepaymentLoan RepaymentLoan Repayment $ $ Secured Loans with Bonds, Notes and MortgagesSecured lending involves a contract between a borrower and lender, where the lender can be an individual, a financial institution or a trust organization. Notes and mortgages represent formal contracts between financial institutions and owners. Usually, repayment amounts and timing are specified in the loan agreement. Public facilities are often financed by bond issues for either specific projects or for groups of projects. For publicly issued bonds, a trust pany is usually designated to represent the diverse bond holders in case of any problems in the repayment. The borrowed funds are usually secured by granting the lender some rights to the facility or other assets in case of defaults on required payments. In contrast, corporate bonds such as debentures can represent loans secured only by the good faith and credit worthiness of the borrower. Under the terms of many bond agreements, the borrower reserves the right to repurchase the bonds at any time before the maturity date by repaying the principal and all interest up to the time of purchase. The required repayment Rc at the end of period c is the net future value of the borrowed amount Q less the payment made at intermediate periods pounded at the borrowing rate i to period c as follows:()The required repayment Rc at the end of the period c can also be obtained by noting the net present value of the rep