Current Master Lease Contract:

Vendor                            Contract Number               Smart Contract Number 
Hilltop Securities, Inc. 8200029418 1130-17-C-SWCT-00125


Master Lease Purchase Program Description





The purpose of this overview is to familiarize you with the Mississippi Master Lease Purchase Program (the “Program”) that has been in place since the early 1990s. The Program was initiated by the State of Mississippi, acting through the Department of Finance and Administration (“DFA”) pursuant to Section 31-7-10 of the Mississippi Code of 1972 (the “State Master Lease Purchase Statute”), for the purpose of enabling agencies of the State of Mississippi (collectively, “State Agencies”) to acquire equipment essential to their operations through a State-wide program administered by DFA.

Master Lease Purchases



How was the Program Established?


The State Master Lease Purchase Statute was enacted in June 1990.  The statute requires that all State Agencies must participate in the Program when acquiring equipment by lease purchase unless the equipment cannot be acquired by lease purchase under the Program or unless the equipment can be acquired elsewhere by lease purchase at an overall cost that is lower than that for which such equipment can be acquired by lease purchase under the Program.  However; some exceptions are allowed by the statute.  The exceptions are the Mississippi Institutions of Higher Learning and any State Agency that has specific statutory lease purchase authority to acquire equipment by lease purchase.  DFA solicited proposals for a financial advisor and lessor in connection with the Program and  through the competitive process, DFA selected Hilltop Securities, Inc ("Hilltop”) to act as Financial Advisor to the State and FirstSouthwest Leasing Company to act as Lessor under the Program.   The Program has been approved by the State Bond Commission and validated by judicial order pursuant to State law.

 Thirty-eight (38) State Agencies have participated in the Program since its inception. Please see the attached Exhibit "A" for a list of series funded over the last five years under the Program.

What are the Benefits of Participating in the Program?


Lower Overall Lease Purchase Financing Costs to State Agencies
DFA established and designed the Program to provide each State Agency with competitive interest rates and low financing costs for lease purchase transactions. The interest rates paid under the Program are typically below those that historically have been achieved by lease purchase agreements entered into by State Agencies acting individually. DFA achieves this result by aggregating the lease purchase needs of all State Agencies into a single transaction that utilizes standardized documentation and procedures. Due to its aggregated dollar volume, the transaction can be insured or rated, which further reduces the interest rate to the State Agencies. DFA can then access the public markets through the competitive or negotiated sale of insured and/or rated Lease Revenue Certificates of Participation (“COPs”).  The COPs are tax-exempt municipal securities, and they represent the investor’s interest in the lease payments.  Alternatively, DFA can give local, Mississippi banks the opportunity to bid on the Program for financing through a negotiated, competitively-bid process reducing the cost of issuance and timing of the financing.   Participation in the Program creates an economy of scale such that each participating State Agency can take advantage of factors such as increased dollar volume, standardized documentation and procedures, insurance, rating and the ability to access the public markets.

Ease of Access and Administration
The centralized procurement, documentation and financing process offered by the Program simplifies and minimizes the costs of administration relating to equipment financing for both DFA and the State Agencies while providing the State Agencies with quick and easy access to the financial benefits of the Program. Access to the Program is simplified by establishing DFA as a central source for contact with respect to the lease purchase financing needs of State Agencies. The Financial Advisor and Lessor work closely with DFA and the participating State Agencies to ensure that benefits are enjoyed by all State Agencies. DFA, the Financial Advisor and the Lessor are available to answer any Program questions or to discuss any upcoming equipment needs.  All required documentation is drafted by the Financial Advisor and approved by DFA and its counsel prior to being forwarded to the State Agencies.

Financial Certainty and Flexibility
The structure of the Program provides flexibility to State Agencies by making funds available to pay for the purchase, delivery and installation of equipment acquired from each vendor when needed or desired. This allows State Agencies to take advantage of prompt payment discounts or to make necessary progress payments to vendors if those payments result in overall savings to State Agencies. The financing structure of the Program also provides a degree of flexibility which allows each State Agency to make lease payments over a lease purchase term appropriate to the useful life for each particular item of equipment acquired under the Program and each State Agency’s budgetary needs or constraints. The Financial Advisor will work with each State Agency to develop a customized amortization schedule of lease payments that will fit each State Agency’s needs under the Program. The Program also provides each State Agency with potential opportunities to refinance existing lease purchase obligations at current market rates.

Types of Equipment Eligible to Lease-Purchase
The State Agencies have a wide range of equipment that may be financed using the Program. Representative items of equipment include:

  • rolling stock including sedans, trucks, vans and buses
  • farming and agriculture equipment and implements
  • energy management equipment
  • computer equipment including hardware and software
  • printers, scanners and copiers
  • modular office and classroom furniture
  • portable radios and related hardware
  • fiber optic cable systems
  • telecommunication equipment
  • equipment used in crime analysis
  • aircraft
  • research and medical equipment
  • printing presses
  • heavy road equipment
  • modular buildings
  • trailers


How is the Program Structured?


  • The Financial Advisor periodically surveys the State Agencies to determine if equipment needs exist.  In addition, a State Agency may contact the Financial Advisor at anytime to discuss its upcoming equipment needs and lease-purchase options.
  • The State Agency must comply with all State statutory requirements for acquiring equipment.
  • When sufficient aggregate dollar volume—generally around $2 million--is reached to access the public markets, the Financial Advisor will request authorization from DFA to proceed with a series of the Program.  DFA usually authorizes one or two series each year.
  • Structurally, the Program consists of a series of individual financings in which the lease purchase or refinancing needs of one or more State Agencies are combined and funded collectively.
  • Under each series of the Program, DFA enters into a Master Lease Purchase Agreement (the “Master Lease”) with the Lessor.
  • Each State Agency participating in a series enters into an Agency User Agreement with DFA.  Under the Agency User Agreement, each State Agency agrees to lease-purchase (or refinance) the equipment that it has selected and agrees to make semi-annual lease payments to DFA.
  • To obtain the money required to pay the equipment vendors and the costs associated with the financing, the Lessor will assign all its rights under the Master Lease, including any interest it obtains under the Master Lease and its right to receive the lease payments payable by DFA, to a trustee (the “Trustee”).  The Trustee, competitively selected by DFA, is currently U.S. Bank National Association located in Olive Branch, Mississippi.
  • The Trustee facilitates the sale of a series of COPs to investors in the public markets.
  • On closing date, Trustee delivers the COPs to the investors.  The investors wire funds to the Trustee.  The Trustee pays the costs of issuance, establishes a reserve fund, if a reserve fund is needed and deposits the equipment costs into an Acquisition Fund.
  • Three options for paying equipment vendors

1.         If a State Agency can coordinate acceptance of equipment with the actual closing date of a series, a State Agency may direct the Trustee to pay directly one or more vendors for equipment that the State Agency has already accepted.
2.         Second, if the State Agency has available funds and needs to acquire equipment before the closing date, a State Agency can accept equipment, pay the vendor and seek reimbursement when the series settles. The rules for reimbursement are governed by the Internal Revenue Code.  Generally, the State Agency will need to declare its official intent to reimburse itself through the Program by entering into a Declaration of Intent to Reimburse (a “Declaration”).  The Declaration states that the State Agency intends to be reimbursed with the proceeds of a tax-exempt obligation.  Assuming that the Declaration is executed within sixty (60) days of the payment to the vendor, the State Agency can accept the equipment and pay the vendor in full, then request reimbursement from the Trustee on the closing date.
3.         If the State Agency has not yet accepted the equipment on or before the closing date, the Trustee will deposit the amount required to acquire the equipment or to refinance existing lease purchase obligations into an Acquisition Fund on behalf of the State Agency.  This is the most commonly utilized method of vendor payment.  To request vendor payment after the closing date, the State Agency will complete a Request for Disbursement which is attached to each Agency User Agreement, attach the invoice, any title application and other required items, and fax or email to the Lessor for processing.  The Lessor will reconcile the amounts, record the request, and forward to the Trustee for payment.  Vendor payments are typically processed within 24 hours of receipt.

  • If a State Agency has equipment needs which arise between series of the Program, the State Agency can obtain interim financing which is coordinated through DFA and the Financial Advisor.  The interim financing will be paid off when the next funding under the Program is completed.  For details on interim financing, please contact the Financial Advisor.
  • Pursuant to the Agency User Agreement, each State Agency will remit its semi-annual lease payments to DFA by submitting a check or warrant to DFA.  If an Agency User fails to make any payment to DFA when it is due, DFA can exercise its warrant authority to draw the amount due from any funds available to the Agency User to make its lease payments.
  • DFA will remit the aggregate semi-annual Lease Payments to the Trustee.  In turn, DFA will collect the semi-annual lease payments made by all the participating State Agencies and will use the aggregate amount to make the lease payments required under the Master Lease to the Trustee.
  • The Trustee will use the Lease Payments to make distributions to the purchasers of the COPs.
  • Note:  The obligation of a State Agency to make lease payments to DFA and of DFA to pay the aggregate semi-annual lease payments to the Trustee does not create a “debt”, as defined by the State Constitution.  DFA has not pledged any taxes to the payment of the lease payments.  The payment of the lease payments is subject to DFA’s annual appropriation of sufficient funds to continue to make the lease payments during that fiscal year.  Nonpayment of lease payments carries potentially significant risks to the State, not only in terms of the Program, but in relation to the State’s general obligation bonds. Rating agencies such as Moody’s Investors Service and Standard & Poor’s view non-appropriation as a serious matter and could potentially downgrade the State’s overall credit rating, which could result in loss of investor confidence, loss of access to the public markets, and higher costs of borrowing.
  • Recent series of COPs were rated “AA-” by Standard & Poor’s Corporation, based on the State’s underlying credit rating.
  • Title to the equipment acquired under the Program will vest in the respective State Agencies subject to a security interest which secures the obligation to make lease payments. If a State Agency acquires computer/technology equipment under the Program, the State Agency will assign title to the computer/technology equipment to the Mississippi Department of Information and Technology Services in accordance with State law. The Financial Advisor will file a financing statement with the Mississippi Secretary of State that perfect the Trustee’s security interest in the equipment acquired and financed under the Program.
  • The Financial Advisor will provide semi-annual invoices well in advance of the lease payment due dates.
  • Questions regarding damaged or destroyed equipment that is acquired under the Program or about prepayments or payoffs should be directed to the Financial Advisor.

How do State Agencies Participate in the Program?



      • Representatives of the Financial Advisor are available to discuss the Program, the State Agency's anticipated lease purchase and lease purchase refinancing needs, and the requisite approval process to be undertaken with respect to procurements made under the Program in accordance with State law. Each State Agency interested in participating in the Program should contact:


Ms. Vickie Hall, Vice President Ms. Shari Goldberg
Hilltop Securities Inc. Hilltop Securities Inc.
1201 Elm Street, Suite 3500 1201 Elm Street, Suite 3500
Dallas, TX 75270 Dallas, TX 75270
214-953-8874 or 800-809-9216 214-859-6058 or 800-809-9216
Fax: 214-953-4050 Fax: 214-953-4050
Email: Email:


      • Additionally, State Agencies may discuss the Program with DFA by contacting:
Ross Campbell, Chief Procurement Officer Belinda Russell, CPM, CMPA
Director, Office of Purchasing, Travel and Fleet Management Staff Officer, Office of Purchasing, Travel and Fleet Management
Mississippi Department of Finance and Administration Mississippi Department of Finance and Administration
Woolfolk Building, Suite 701 A Woolfolk Building, Suite 701 A
501 North West Street 501 North West Street
Jackson, Mississippi 39201 Jackson, Mississippi 39201
Email:  Email: 


      • Each State Agency participating in the Program will need to provide certain information including:

1.     a detailed description of the equipment to be acquired or refinanced, including a detailed description of the essentiality or need of the equipment for the program or project and the estimated costs to be financed by lease purchase under the Program;
2.     information concerning the useful life of the equipment, the expected date(s) of delivery and acceptance of the equipment, and the proposed financing term; and
3.     a detailed description of the State Agency as well as a description of the particular department, if any, within such State Agency that will utilize the equipment.

A Basic Equipment Planning Form is attached as Exhibit "B".

In addition, each participating State Agency may be asked to submit other documentation including expenditure authority, budget requests that may relate to the equipment to be acquired under the Program or any other information deemed appropriate by DFA and the Financial Advisor.  For instance, a State Agency participating in the Program to refinance an existing lease purchase obligation should submit a copy of the original lease or information concerning the date the obligation was incurred, the original equipment acquisition cost and amounts financed, an amortization schedule of the payments to be made in connection with the obligations, and the relevant dates for exercising purchase options or prepayment options.


Exhibit A - List of State Agency Master Lease Series

Exhibit A


  • SERIES 2015A dated July 30, 2015

      Participating Agencies:  Mississippi Board of Animal Health, Ellisville State School, Copiah-Lincoln Community College, Clarksdale Municipal School District, Greene County School District and Long Beach School District
      True Interest Cost:         2.353950%
      Equipment:                  Trucks, disk filter for sewage system, technology equipment, computers, servers, switches, wireless access points, storage area network(SAN), school buses
      Total equipment costs
      lease-purchased in
      Series 2015A:                     $3,657,729.00

  • SERIES 2016A dated May 19, 2016

      Participating Agencies:   Mississippi Department of Transportation, Mississippi Valley State University and Jackson State University
      True Interest Cost:          1.6059%
      Equipment:                   Aerial lift trucks, roller applicator, friction tester, excavators, mechanics trucks, dump trucks, bucket truck, asphalt milling machine and spreader, police cruisers, school buses, and musical instruments
      Total equipment costs
      lease-purchased in
      Series 2007B:                     $3,305,642.00

  •  SERIES 2017A dated February 7, 2017

      Participating Agencies:   Mississippi Department of Transportation
      True Interest Cost:           2.200546%
      Equipment:                    Tractor truck, asphalt paver, track-mounted drill rig, falling weight deflectometer, x-ray for chemical analysis, aerial lift truck and truck with digger
      Total equipment costs
      lease-purchased in
      Series 2017A:                     $1,637,000.00

  • SERIES 2017B dated July 26, 2017

      Participating Agencies:    Jackson Public School District and Columbus Municipal School District
      True Interest Cost:          2.22%
      Equipment:                   School buses
      Total equipment costs
      lease-purchased in
      Series 2017B:                     $4,865,617.00

  • SERIES 2018A dated June 29, 2018

      Participating Agencies:   Mississippi Department of Agriculture and Commerce, Mississippi Department of Revenue, Cleveland School District and North Panola School District
      True Interest Cost:          3.12%
      Equipment:                   Computer and technology hardware, handheld scanners, vehicles, HVAC units, industrial kitchen appliances, electronics and technology such as tablets, printers, servers and switches, mowers and school buses
      Total equipment costs
      lease-purchased in
      Series 2018A:                     $3,350,547.00

  • SERIES 2018B dated October 18, 2018

      Participating Agency:     Mississippi Department of Transportation and Alcorn School District
      True Interest Cost:         2.96%
      Equipment:                  Under bridge inspection truck, chipper and spreader, striping truck, rubber truck equipment carrier, falling weight deflectometer, rotary sweeper, tractors, and school buses
      Total equipment costs
      lease-purchased in
      Series 2018B:                     $3,624,250.00

  • SERIES 2019A dated July 18, 2019

      Participating Agencies:    Mississippi Board of Animal Health, Mississippi Department of Corrections, Cleveland School District and Greene County Public Schools
      True Interest Cost:          2.40%
      Equipment:                   School buses, trucks, sedans, agricultural equipment and other vehicles, security cameras, electronic door access controls and classroom furnishings
      Total equipment costs
      lease-purchased in
      Series 2019A:                     $4,105,000.00

  • SERIES 2020A dated March 5, 2020

      Participating Agencies:    Ellisville State School and Copiah-Lincoln Community College
      True Interest Cost:          1.94%
      Equipment:                     Computers, switches and technology equipment
      Total equipment costs
      lease-purchased in
      Series 2020A:                     $1,305,000.00