Frequently Asked Questions

Does the NSMFC provide interim financing?

The policy of the Board is that only completed projects are financed through the issuance of debentures. The NSMFC does offer short-term financing to clients that have completed their capital projects and are waiting to participate in the debenture process.

What interest rate does the NSMFC charge?

The cost of the borrowing depends on the term of the debenture and market conditions. The pricing is based off the Province of Nova Scotia's cost of funds, plus a number of basis points for the NSMFC. The NSMFC also charges a fee for the reserve fund and to cover issuing costs. NSMFC debenture prices have remained consistently lower than commercial banks and financial institutions.

What are the benefits of borrowing from the NSMFC?

Municipalities realize cost savings by borrowing from the NSMFC in at least three ways.

  1. Competitive rates
  2. Pooled administration of the municipal debentures
  • By NSMFC issuing debentures on their behalf, municipalities avoid the costs of issuing and administering the debentures
  1. Pooling of debentures to a marketable size

Who can borrow from the NSMFC?

Municipalities, municipal enterprises (with a municipal guarantee), regional school boards, and hospitals – with the required ministerial approval.

Is it possible to borrow from the NSMFC at any other time than the spring or fall debenture issues?

Yes, the NSMFC will issue single-issue debentures. The NSMFC also offers a short-term financing program.

Can the debenture be paid off prior to maturity?

Debentures must be outstanding to maturity, which is they are not subject to redemption prior to maturity. When the NSMFC issues debentures, the Corporation is locked into the same maturity schedule including principal and interest payments as its clients. For this reason the NSMFC does not provide for early redemption of debentures.