Verification Report
A document that verifies the mathematical accuracy of information needed to support bond counsel’s conclusions that an advance refunding bond issue is a tax-exempt bond issue and/or that refunded bonds are defeased.
bond-basics
Default
Breach of a covenant, promise or duty imposed by the Bond, Bond Resolution/Ordinance, an Indenture or other financing document (such as a Letter of Credit Reimbursement Agreement). The most basic type of Default is a payment default (i.e., when the Issuer (or Borrower) fails to pay Principal, Interest, or Redemption price on a Bond Issue when due). Other types of Defaults are often referred to as “technical” defaults, since, rather than involving failures to make payments, they are triggered when contractually defined “Events of Default” occur, such as failure by the Issuer or Borrower to comply with a covenant (e.g., a failure to charge rates sufficient to meet rate covenants or a failure to maintain prescribed Insurance). A Default becomes an Event of Default, which triggers whatever remedies may be provided in the Bond documents, when the Default remains in existence after the allowable cure period provided in the Bond documents.
