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Why did the Tennessean pull the article on the IDB Bonds that NISSAN has used as Collateral?

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Nissan, IDB settle dispute on bondsAutomaker to pay $6.25M Written by Sam Stockard

11:00 PM, Oct. 26, 2011

MURFREESBORO — Nissan North America will pay the Rutherford County Industrial Development Board $6.25 million for nearly $2 billion in bonds issued beginning in 1980, settling a dispute over the amount the automaker owes.

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“This story is about the $3.95 billion in bonds on which Nissans owes the IDB.

I'd have to get the contract for the 2008 bonds and look at it. The $1.6 billion

Is a loan from the feds, and I'm not sure how they're paying it. That might be

another story.” Gannett Reporter Sam Stockyard in an email to Sharyn Bovat.
************** The IDB voted unanimously Wednesday morning to approve a memorandum of agreement with Nissan after the two groups went through non-binding mediation Oct. 17 with former federal judge Robert L. Echols to resolve a disagreement over the interpretation of "bonds" from a 1980 contract that was amended in 2000.

Nissan contended it owed about $5.5 million for bonds the IDB issued for construction of the Smyrna auto plant and equipment improvements over the years, while the IDB said Nissan owed about $7.5 million, according to IDB members.

Nissan's first payment is due Feb. 15, 2012, and another, which can be no less than $824,000, is to be paid to the IDB in Feb. 15, 2022, for bonds issued in March 2000 under the amended agreement.

"We essentially split it down the middle," IDB attorney Sumner Bouldin said of the agreed payment.

The IDB has issued a total of $3.95 billion in bonds to Nissan throughout the life of the project to cover the plant's construction and some equipment, and Nissan still owes on $2 billion more in outstanding bonds, according to Bouldin. There's no way to know how much is due in 2022 on the second payment, he stated, noting the agreement merely establishes a minimum payment.

IDB member Edwin Davenport of Smyrna called the resolution "very fair."

"I think it was positive for both parties," Davenport said. "I think it's a great opportunity. This is a continuation of a very positive partnership we've had with Nissan from the very beginning."

Nissan spokesman Steve Parrett said at issue was the interpretation of the term "bonds" as used in the calculation of the purchase obligation payable at the end of the agreement. The differing interpretations led to a difference in the purchase obligation calculations.
He added Nissan is satisfied with the result of the mediation process.

In 1980, when Rutherford County was competing with Cartersville, Ga., for the Nissan plant, the county IDB signed a 20-year lease agreement with Nissan and issued $450 million in bonds for construction of the Smyrna plant and $25 million for a pollution control project. In return, Nissan agreed to build 10,000 to 20,000 vehicles per month and 20,000 to 40,000 per month in a second phase.
The company agreed to pay 2 percent of the first $50 million and .25 percent on any amount in excess of that, with a payment coming due Feb. 15, 2012, and in February 2022.

In 1989, the IDB issued another $450 million in bonds for an expansion at the plant to build a new vehicle line. The agreement also covers bonds issued for new equipment to build new vehicle lines.

The $6.25 million payment will satisfy Nissan's obligation on a first series of bonds issued by the IDB, according to the memorandum.

In 1980, the IDB approved payments in lieu of taxes for Nissan, enabling the company to pay $100,000 in the first year, with the amount escalating annually to $1.8 million in 1990 and then increasing annually by 33.3 percent of the combined city/county property tax rate.

In October 2009, the IDB approved a 20-year $62 million tax abatement with Nissan as part of the company's plan to build a battery plant and start manufacturing the all-electric Leaf in December 2012. Two months later, the state Department of Economic and Community Development and Comptroller of the Treasury authorized a $98 million tax break through 30 years for the automaker.

In addition to the tax abatement, Nissan received approval from the Rutherford County Commission to issue up to $2.5 billion in bonds for the project. The company got a $1.6 billion loan from the federal government to produce the zero-emission Leaf.

The Tennessean reported Wednesday that Nissan's Smyrna plant could start making vehicles to export overseas instead of being limited to North American sales. The article was based on reports by Japanese media that Yokohama-based Nissan Corp. is planning to shift production of the Teana sedan to Smyrna.

"Certainly, Nissan has been a huge driver for our community's economy," IDB member Rob Lyons said, pointing toward news of possible overseas exports. "I think this (memorandum) is an excellent outcome."