In a land of opportunity, First National Bank Alaska owns a rich history of helping provide opportunity to all Alaskans.
One way the bank accomplishes this is through its work with the Office of Indian Energy and Economic Development (OIEED) loan guaranty program and Alaska Native-owned companies and subsidiaries.
First National is the state’s top OIEED lender.
Lending to Alaska Native for-profit companies is not unlike lending to any other business.
Pledged collateral whether it’s buildings, equipment or tenant improvements are on privately-owned property. The preponderance of First National’s OIEED lending is secured by property and equipment residing on private property. It becomes more challenging when the collateral is built on or resides on tribal land.
Remember, Native villages are recognized by the federal government as sovereign nations so foreclosure or repossession on tribal land requires consent of the Native village. For practical purposes, lenders often require community leaders to execute a Waiver of Sovereignty specific to the asset(s) being pledged.
The OIEED Loan Guaranty Program helps First National meet the needs of many Alaskans. To qualify for an OIEED guaranty, the borrower must be at least 51-percent Native owned, but as mentioned earlier, jobs are created for both Native and non-Native employees to the economy’s benefit.
As the top OIEED lender in the state, First National had 46 OIEED guaranteed loans with an aggregate balance in excess of $118 million near the end of 2012.
How does a bank collateralize itself while providing construction and term financing for a several hundred mile-long submerged fiber-optic cable? Kodiak-Kenai Cable Company’s unconventional project came to life when the bank helped secure a 90-percent OIEED loan guaranty.
Kodiak Island, once served by bouncing signals off satellites, now has sub- sea cable service that is relayed from the city of Kodiak to surrounding villages like Ouzinkie and Old Harbor. Now diagnosis of medical conditions in remote Kodiak is accomplished by doctors in Anchorage by means of telemedicine. Communications are more reliable, better quality and at a more reasonable cost.
Native non-profits benefit from the OIEED guaranty program as well. The Native Village of Tyonek is recognized by the Department of Interior as the Indian Tribal Government for the village of Tyonek. The village administers contracts and grants for the benefit of Native inhabitants of Tyonek pursuant to the Indian Tribal Government Tax Act of 1982 as amended.
Village chief Frank Standifer recognized a need to renovate their headquarters building and to remove asbestos from the forty-seven year old structure. The building houses village offices, Tyonek Native Corporation, Tyonek Constructors Inc., a university program, and government and non-profit organizations that benefit the community. The bank secured an OIEED guaranty on a bank held term loan so that we could fund a construction loan to do the work necessary for the building to be of service for decades to come.
OIEED Loan Guaranty program can also be used for smaller projects. One example is the Aurora Lodge loan. Many rural Alaskans have never traveled out of the village or their region. A first trip to Anchorage can be a culture shock. An OIEED guaranteed loan from First National Bank Alaska let 15th Terrace LLC finance a small boarding house called Aurora Lodge in a quiet part of town that is enjoyed by visitors from rural Alaska.
OIEED does not have maximum or minimum loan restrictions. If a loan makes sense it will be considered. First National has individual loans guaranteed in excess of $10 million. But when a villager needs a new kicker (outboard boat motor) to pull his fish nets from the Kuskokwim River, or needs $2,000 for fuel oil to heat the house over winter, we make those loans at the branch and get paid when seasonally made money comes to the borrower.
Working hand in hand with OIEED allows Alaska-owned First National Bank Alaska to help Alaska Native enterprises grow and prosper. In turn, this work makes it possible for the bank and Alaskans to succeed.
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