Tax Arbitrage

This panel will cover Arbitrage Rules that apply to tax-exempt bonds. These rules limit the ability of an issuer to earn a profit by investing unspent proceeds of tax-exempt bonds at a yield higher than the yield earned by the bondholders. The calculation addresses two key questions: Can an issuer earn an investment yield that is materially higher than the bond yield? And if an issuer can earn it, can the issuer keep it, or must the issuer pay a 100% tax on it to the federal government (referred to as “rebate”)? Current events and rate environments have led to strategic decisions for issuers lately – this panel will address all pressing issues.