Inducement Resolution

A resolution adopted by the Issuer or the Borrower to indicate the preliminary intention to issue the Tax-Exempt Bonds, subject to satisfaction of certain conditions precedent which may be satisfied on or after the adoption of a Bond Resolution. Inducement Resolutions are particularly common in Conduit Financings.  In addition, an Inducement Resolution may be used for purposes of Section 1.150-2 of the Treasury Regulations as the “Declaration of Intent” of the parties to use the Tax-Exempt Bond proceeds to reimburse expenditures paid from another source prior to the date the Tax-Exempt Bonds are issued. 

Get it in Writing

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

See Also

Official Action / Intent

The evidence of official intent of the Issuer (or the conduit borrower if it is a 501(c)(3) organization) to reimburse expenditures with proceeds of the bonds.

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TEFRA Notice

A notice of a TEFRA hearing, which, under the Treasury Regulations, must be published one time, at least seven days prior to the TEFRA hearing, in a newspaper of general circulation in the geographical jurisdiction of the Issuer of the tax-exempt bonds and in any “host jurisdiction” (or on the appropriate governmental entity’s website).