TaxExempt Bonds After the Closing

1
Tax-Exempt Bonds After the Closing

• McKennon Shelton Henn LLP
• William L. Henn, Jr.
• Kimberly C. Betterton
• JoAnn E. Levin

2
Tax-Exempt BondsPost-Issuance Compliance

• Tax Law
• Securities Law

3
Tax Law Matters

• Basic Federal Tax Requirements
• Post-Issuance Topics
• Post-Issuance Problems
• Preventative Measures
• Remedial Measures

4
Tax-Exempt BondsPost-Issuance Compliance

• Basic Federal Tax Requirements
• Use of Proceeds
• Arbitrage
• Miscellaneous

5
Post-Issuance Topics

• Use of Bond Proceeds
• Investment of Bond Proceeds
• Private Use of Bond-Financed Project
• Calculation and Payment of Rebate
• Record Retention
• Increased IRS Audit Activity

6
Post-Issuance Problems

• Change in Expected Project
• Change in Use of Bond-Financed Project
• Excess Bond Proceeds
• Reissuance of Bonds

7
Preventative Measures

• Know Your Documents
• Maintain a Tax-Exempt Bond Spreadsheet
• Use Your Counsel
• Issue Taxable Bonds or Obtain Other Taxable
  Financing

8
Remedial Measures

• Correct the Error
• Take a Remedial Action
• IRS (VCAP)
• Voluntary Closing Agreement Program

9
Securities Law Compliance

• Securities Regulation of Municipal Bonds
• SEC Act of 1933
• SEC Act of 1934
• MSRB

10
Continuing Disclosure AgreementRule 15(c)2-12

• Why Disclosure?
• Who is the Obligated Person?
• What is Disclosed?
• When is Disclosure Made?
• Where is Disclosure Made?

11
Material Events

• Adverse Tax Opinions or Events Affecting the
  Tax-Exempt Status of the Security
• Modifications to Rights of Securities Holders
• Bond Calls
• Defeasances
• Release, Substitution, or Sale of Property
  Securing Repayment of the Securities
• Rating Changes
• Failure to Provide Annual Financial Information

• Principal and Interest Payment Delinquencies
• Non-Payment Related Defaults
• Unscheduled Drains on Debt Service Reserves
  Reflecting Financial Difficulties
• Unscheduled Draws on Credit Enhancements
  Reflecting Financial Difficulties
• Substitution of Credit or Liquidity Providers, or
  their Failure to Perform

12
Nationally Recognized Municipal Securities
Information Repositories(NRMSIRs)

• Bloomberg Municipal Repository
• Interactive Data Pricing and Reference Data, Inc.
• DPC Data Inc.
• Standard Poors Securities Evaluations, Inc.
• DisclosureUSA
• DAC

13
Current Developments

• The City of San Diego Case
• Repeal of the Tower Amendment