Celesq® Programs

Alternatives to Tax-Exempt Advance Refundings

Active
Program Number
32104
Program Date
2022-05-11

In December 2017, former President Donald Trump signed into law the Tax Cuts and Jobs Act. Among the many provisions of the act was a provision that eliminated the tax exemption for municipal bonds that advance refunded another series of bonds. Prior to its passage, issuers had the ability to issue such bonds on a tax-exempt basis, and did so for a variety of reasons, including to achieve debt service savings. With the loss of tax-exempt status for advance refunding bonds issued after the passage of the act, issuers and their advisers have searched for alternatives to the traditional tax-exempt advance refunding model. 

In this webinar, we explore some of the alternatives that issuers have applied to achieve the same or similar benefits that would be achieved with a traditional tax-exempt advance refunding. First, we discuss the use of “forward delivery” bonds, where the bonds are sold, but not delivered to investors until a much later date in the future; second, we consider so-called “Cinderella” bonds, which are issued taxable but later convert to tax-exempt; and finally, “tenders and exchanges,” where issuers, often in conjunction with a current issuance, make an offer to investors to acquire their outstanding bonds, either for purchase or exchange.

Available in States

  • California
  • Colorado
  • Florida
  • Georgia
  • New Jersey
  • New York
  • Texas Self Study

Program Categories

  • Banking & Finance Law
  • Business Organizations & Contracts
  • Federal Courts
  • Financial Regulatory
  • Florida Eligible
  • Taxation Law