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.
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.