Native American Financing Expert Utilizes IMN Conference Forum to Examine Muni Bonds By Myron Struck LAS VEGAS, Nev., March 25 - You'd think that being a director, screenwriter, actress and the former live model for the Disney-Mattel Pocahontas doll would be enough. But for Valerie Red-Horse, it was just the start of living out a passion for doing. Now, she's helping Indian Country in another way. Red-Horse, Senior Managing Director of Western International Securities' Tribal Finance Division, discussed the fundamentals of how Native American tribes can use municipal bonds to build stronger tribal nations at the recent 8th Semiannual Native American Finance Conference. Red-Horse, who is also President of Red-Horse Financial Group, explained that tax-exempt debt can be used for "essential government purposes," but only in those areas that are so-defined by the Internal Revenue Service. As a result of such financing, the lender or investor does not pay federal income tax on interest payments received from tribal issuers, she said in her presentation at the conference in Las Vegas, Nev., hosted by Information Management Network. There is a lower interest rate for the tribal issuer, typically 2 percent to 3 percent, Red-Horse said, and there is usually a longer term for the debt Ð 10 years to 30 years, she noted. "Tax exempt debt service can be paid for/secured by cash flow from casino/resort or other 'taxable' sources, but the proceeds from tax-exempt financings cannot be utilized for taxable purposes," said Red-Horse, 48, daughter of a Cherokee. It "must only be utilized for infrastructure." In her presentation, "Fundamentals of Municipal Bonds for Tribal Nations," Red-Horse said Indian Country has financed such projects as hospitals, clinics, schools, public safety facilities utilized by police and fire, water treatment and sewer systems, energy systems, tribal government service buildings, museums, cultural centers, and housing. However, not every project earns clear rights, and the IRS has issued some challenges to municipal bond issuances for hotels, conference centers associated with gaming facilities, golf courses, manufacturing, and "any project deemed too commercial," she said. Municipal bonds are usually arranged, she said, through third party team members, such as investment bankers, financial advisors, or private placement agents. Red-Horse said that utilizing municipal bonds in this manner provides for access to a "wider pool of capital," allows for the project to have "more competitive rates/terms," and when an expert legal team is utilized, the process lessens the exposure "to IRS challenge or audit risk." Red-Horse's background information notes that she has handled more than 50 tribal financings totaling more than $2 billion in transactions, "including debt, equity and advisory mandates." She is also a successful filmmaker and director. Red-Horse's Web presentation includes notations that she has worked with, or on, projects that include: La Jolla Band of Luiseno Indians (w/Credit Suisse); Gabrieleno/Tongva (San Gabriel Band) Development Financing; White Earth Administration Building Bond Financing; Nambe Pueblo Casino Financing (w/Innovation Capital); Tunica Biloxi Tribe of Louisiana (w/Deutsche Bank); Bad River Band of Chippewa Indians Bond Offering; Leech Lake Band of Ojibwe Indians Advisory Contract; White Earth/Red Lake/Leech Lake Combined Financial Advisory Project; White Earth Casino Financial Advisory Project; Mohegan Sun Tax Exempt Infrastructure Offering (w/Citigroup); Santa Ana Casino Refinancing Project (w/Merrill Lynch); Sac and Fox Casino Structure Financing (w/Bank of America); and the Mashantucket Pequots. Red-Horse can be reached through Western International Securities Tribal Finance Division/Red-Horse Financial Group, 16421 Barnstable Circle, Huntington Beach, CA 92649; (cell) 818/389-4714; (office) 818/705-2588or 714-846-3810; valerie@wisdirect.com; http://www.valerieredhorse.com/index.cfm