The Public Finance Tax Blog

This blog is written by the public finance tax group of Squire Patton Boggs. We are one of the largest and most experienced public finance tax groups in the country, with six tax attorneys who devote themselves exclusively to this area and collectively possess more than 100 years of experience in handling the federal tax aspects of public finance, and several additional tax attorneys who work in public finance tax and other areas as well.

As The Countdown To The New Issue Price Regulations Continues, Let The Document Negotiations Begin!

The effective date of the new issue price regulations (Regulations) is less than a week away, and because of the need to discuss and plan for application of the new rules with issuers, underwriters and financial advisors for bonds that will be subject to the new rules, we are already gaining experience with documentation relating to the Regulations.  NABL and SIFMA have done an excellent job of providing model documents – sale documents in the case of SIFMA and issue price certifications in the case of NABL – that will significantly smooth the transition from a reasonable expectations standard for establishing issue price to a general rule based on actual sales.  Use of these model documents, with some variations, should ease the burden, which could otherwise be overwhelming, of negotiating these documents for each type of bond sale with each underwriter.  Like all model documents, however, there will undoubtedly be fine tuning as we gain more and more experience working with the Regulations and  negotiating documents for specific transactions.  This post notes two negotiating issues that have been raised in current transactions.… Read more

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When Should An Issuer Of Tax-Advantaged Bonds Use The Hold-the-Offering-Price Method To Establish The Issue Price Of The Bonds?

Three score and thirteen years (and one day) after D-Day (June 7, 2017, for the non-history-buffs), the new regulations that prescribe the methods for determining the issue price of tax-advantaged bonds take effect.  Of the various methods for determining the issue price of tax-advantaged bonds, the hold-the-offering-price method is the only one that allows an issuer of such bonds in an underwritten transaction to know with certainty in advance of the sale date of the bonds that the issue price of the bonds will be established on the sale date.  As discussed below, however, this method will come at a cost to issuers of tax-advantaged bonds.… Read more

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The Countdown To June 7, 2017…..Are You Ready?

On June 7, 2017, the Final Issue Price Regulations (the “Final Regulations”) become effective.  More specifically, the Final Regulations apply to bonds sold on or after June 7, 2017 and without regard to the bonds’ issuance date.  Suffice it to say, if you have read our blog or been practicing in the area of municipal finance for any period of time, you know that June 7, 2017 is a date that is YEARS in the making.… Read more

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A Requiem for Reasonable Expectations

The “reasonable expectations” approach to determining the issue price of a tax-advantaged bond,[1] has been the law since 1989. On June 7, it is scheduled to join Betamax tapes and parachute pants as another relic of that bygone decade.… Read more

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Is The Pendulum Of Bond Pricing Beginning To Swing Back Toward Discount Bonds? If So, We Need To Be Prepared For The Resulting Bond Yield Calculations

Premium bonds have been the choice of investors now for many years but is that preference beginning to shift in favor of discount bonds?  Discount bonds are appearing in bond structures with increasing regularity in recent months.  We lawyers leave that question for the underwriters and financial advisors as interest rates turn upward.  However, we need to be prepared for the shift in bond yield calculations that accompany a re-emergence of discount bonds.… Read more

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