Grant Anticipation Note

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Grant Anticipation Note

A bond issued by a state government or state highway bank that is secured by future, expected federal highway funding. States issue grant anticipation notes to provide cash for immediate or time sensitive needs related to highway construction or maintenance. There is no guarantee the state will receive anticipated funding; however, once it is received, it is used to repay the bond. A grant anticipation note is also called a grant anticipation revenue vehicle or a GARVEE.
References in periodicals archive ?
7 million in GARVEE bonds for the "Big Dig" project in Boston to help pay for the reconstruction of part of Interstate 93 as a tunnel.
Without the ability to issue GARVEE bonds to provide upfront capital, the Colorado Department of Transportation (CDOT) would have been unable to bridge the funding gap on the $1.
The answer became clear in 1998 when the federal highway bill known as TEA-21 included a provision called Grant in Anticipation of Revenue Vehicles, or GARVEE for short.
Geoffrey Yarema (Nossaman): "I feel strongly that we need Federal tools--such as GARVEE bonds, TIFIA, and private activity bonds--that save money and make deals more efficient.
The construction of Contract A is funded under the federal GARVEE program.
Legislators also authorized the Highway Commission to sell GARVEE bonds subject to a vote by the public.
The most significant risk to GARVEE bonds remains the lack of a long-term federal transportation funding solution.
One recent mechanism for the long-term financing of federally assisted highway projects is GARVEE bonds.
ADDITIONAL LEVERAGE NOT ANTICIPATED: The authority has reached a statutory cap on GARVEE issuance and additional bonds are not expected in the medium term.
The first, second, and third liens carry additional bonds tests of 4x, 3x and 2x, respectively, although MoDOT's more restrictive policy stands at 5x, 4x and 3x, respectively, levels which ensure sizable residual revenues for other departmental purposes, including backstopping GARVEE bonds and for operations.
Additional leverage on the fourth lien of state road bond fund revenues that drops coverage of GARVEE debt service by state funds below the policy of 2.
In addition, ITD maintains no other debt outstanding than that associated with its GARVEE program.