Archives: Reissuance

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Report from TSLI – What Can We Expect in the Near Term from the IRS?

Last week I attended the NABL Tax and Securities Law Institute, which always provides valuable insights from representatives of Treasury and the IRS.  Vicky Tsilas, Chief, Branch 5, Financial Institutions and Products, was a panelist for Tax Hot Topics and gave a very interesting status report on the 2016-2017 Guidance Plan (first reported on here … Continue Reading

2016 Year-End Review

Despite an increase in the federal funds rate by the Federal Open Market Committee in December, municipal bond interest rates throughout 2016 were (and still are) extremely low when compared to historic rates.  As a result, the volume of municipal bond issues reached an all-time high in 2016. As discussed below, the Treasury Department released … Continue Reading

Crossover Refunding – Does It Really Have to Come to This?

Suppose you, or a friend, issued build America bonds or another form of direct payment subsidy bonds in 2009 or 2010, as permitted by the American Recovery and Reinvestment Act, to do your bit to stimulate aggregate demand during the depths of the Great Recession.  You, or your friend, as applicable, did not, however, include … Continue Reading

NABL Joins the Fray, Asks the IRS to Revoke BABs Reissuance Memo

As Naomi Jagoda reported in The Bond Buyer yesterday ($), the National Association of Bond Lawyers has asked the IRS to revoke Advice Memorandum 2014-009, in which the IRS concludes that if you defease BABs with tax-exempt bonds, the BABs are treated as retired and reissued and are therefore no longer eligible for subsidy payments because the … Continue Reading

More on the BAB Defeasance Memo

Naomi Jagoda has an article in The Bond Buyer ($) today with more commentary on Advice Memorandum 2014-009, where the IRS says that BABs don’t get the benefit of the rule that the defeasance of a “tax-exempt bond” doesn’t cause the bond to be reissued. Note that others in the community are raising the same point that was raised in yesterday’s … Continue Reading

Bah. Humbug. How the IRS Took Away Direct Subsidies from Defeased BABs

Earlier this year, we wrote about issuers that are weary of losing interest subsidies to sequestration and that have paid off their direct pay bonds with tax-exempt bonds. We noted two main questions where the issuer doesn’t pay off the direct pay bonds immediately, but instead puts the refunding bond proceeds into a defeasance escrow … Continue Reading
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