June 10, 2012
Volume was also notably low in 2011 given the sunset of many of the bond provisions created or expanded pursuant to the American Recovery and Reinvestment Act of 2009. One such provision governed bank-qualified bonds – tax-exempt bonds issued by qualified small issuers. On Thursday, May 10th, two members of the House Committee on Ways and Means introduced bipartisan legislation that would permanently increase the bank-qualified debt limit from $10 million to $30 million. The Municipal Bond Market Support Act of 2012 would allow banks to deduct 80% of the interest expense of debt incurred or utilized for the purchase of tax-exempt bonds of issuers whose annual issuance does not exceed $30 million. The bill would also apply the $30 million limit to individual borrowers in conduit financings.
The Philadelphia Authority for Industrial Development (PAID) is a conduit issuer of tax-exempt debt, structured either as public offerings or private placements, for non-profits and qualifying manufacturers in the City of Philadelphia. Non-profits may be able to take advantage of today’s lower interest rates to refinance existing tax-exempt or taxable debt and/or finance new capital projects through PAID’s tax-exempt bond program. PAID’s Tax-Exempt Equipment Lease-Purchase Program is a financing program available to lower the interest costs of qualifying clients’ equipment purchases.