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A conduit debt obligation is defined as a debt instrument having all of the following characteristics: <br />• There are at least three parties involved: (1) an issuer, (2) a third party obligor, and (3) a debt <br />holder or a debt trustee. <br />• The issuer and the third party obligor are not within the same financial reporting entity. <br />• The debt obligation is not a parity bond of the issuer, nor is it cross -collateralized with other debt <br />of the issuer. <br />• The third party obligor or its agent, not the issuer, ultimately receives the proceeds from the debt <br />issuance. <br />• The third party obligor, not the issuer, is primarily obligated for the payment of all amounts <br />associated with the debt obligation (debt service payments). <br />This statement also addresses arrangements, often characterized as leases, that are associated with conduit <br />debt obligations. In those arrangements, capital assets are constructed or acquired with the proceeds of a <br />conduit debt obligation and used by third party obligors in the course of their activities. <br />This statement requires issuers to disclose general information about their conduit debt obligations, <br />organized by type of commitment, including the aggregate outstanding principal amount of the issuers' <br />conduit debt obligations and a description of each type of commitment. Issuers that recognize liabilities <br />related to supporting the debt service of conduit debt obligations also should disclose information about <br />the amount recognized and how the liabilities changed during the reporting period. The requirements of <br />this statement were originally effective for reporting periods beginning after December 15, 2020 and are <br />now effective after December 15, 2021. Earlier application is encouraged. <br />-21- <br />