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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

Hot Topics from the Tax and Securities Law Institute’s Annual Meeting

                Every year, the National Association of Bond Lawyers (“NABL”) hosts the Tax and Securities Law Institute (“TSLI”), which is an advanced conference with various workshops related to pressing issues confronting tax and securities lawyers in the public finance arena.  Essentially, the annual TSLI is like Chrismukkah for tax and securities lawyers.  This year’s meeting … 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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