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. 

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.

Hudson Yards Rail Yards

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Term of the Week

Securities Act of 1933

Law designed to ensure that investors are provided with material information about new issues of securities offered for sale to the public.