Arbitrage Certificate

A certificate (sometimes called a “Tax Certificate,” a “non-arbitrage certificate” or a “use of proceeds certificate”) is a certificate of a responsible officer of the Issuer and/or Borrower certifying compliance with the limitations on Arbitrage imposed on the Tax-Exempt Bonds by the Code and as to certain facts and circumstances in effect at the time of delivery of the Tax-Exempt Bonds concerning the investment of the Bond proceeds and their use, forming a basis to conclude that the Tax-Exempt Bonds are not Arbitrage BondsBond Counsel relies on this certificate in rendering its opinion.

Get it in Writing

Learn more about the various documents involved in a municipal securities transaction.

See Also


Profit from differences in markets. All tax-advantaged bonds are subject in one way or another to the arbitrage requirements, which are contained in Section 148 of the Code and the Treasury Regulations that go along with it.

Arbitrage Bonds

Tax-exempt bonds violating yield restrictions imposed by Section 148 of the Internal Revenue Code (IRC) and Treasury Regulations promulgated thereunder.

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Loan Agreement

In a private placement, the agreement between the issuer and a lender (e.g., a bank) pertaining to the loan of the bond proceeds to the issuer. In conduit financings, the agreement between the borrower  and the issuer pertaining to the loan of the bond proceeds to the borrower.