Commission
A form of remuneration received by a broker, dealer or dealer bank purchasing or selling bonds when acting as agent for a customer.
bond-basics
Cost of Issuance
A defined term under the tax rules, meaning items of expense paid by or on behalf of the Issuer or a Conduit Borrower which are directly related to the issuance and sale of the Bonds (e.g., fees of Bond Counsel, Issuer’s Counsel, Borrower’s Counsel, Disclosure Counsel, Underwriter’s Counsel, Lender’s Counsel, Trustee, Municipal Advisor, Underwriter, and Rating Agency and Printing Costs).
Tax Consideration
Costs of issuance are subject to limits in Private Activity Bond transactions. Under Section 147(g) of the Code, Costs of Issuance that can be financed with proceeds of a qualified Private Activity Bond are generally limited to 2% of the proceeds of the Bond Issue (with certain exceptions for qualified mortgage Bonds or qualified veterans’ mortgage Bonds). These costs are treated as “bad” costs for purposes of determining compliance with the 95% test for exempt facility Bonds and are treated as private business use when determining compliance with the Private Business Tests for Qualified 501(c)(3) Bonds.
See Also
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Pricing
In a competitive sale, it is the term used for when the bids on the bonds are received by the issuer. In a negotiated sale, it is the term used for the process and result of the determination by the underwriter(s) and the issuer of the Interest Rates and public offering prices at which the bonds…