Private Activity Bond (PAB)
The term used in the Code to describe any bond issued as part of a bond issue that meets both of the private business tests or meets the private loan financing test.
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Qualified Small Issue Bond
A type of Tax-Exempt Bond issued as a Private Activity Bond (PAB) permitted under Section 144(a) of the Code if the aggregate authorized face amount is $1,000,000 or less (or, in certain cases, $10,000,000 or less) and at least 95% of the Net Proceeds of the Bonds are to be used (i) for the acquisition, construction or improvement of land or property of a character subject to the allowance for depreciation in connection with a “manufacturing facility,” or (ii) to redeem part or all of a prior Bond Issue which was itself a Qualified Small Issue Bond. Other general Private Activity Bond rules also apply.
See Also
Conduit Financing
Financing in which the Issuer issues the bonds to finance a project to be used primarily by a third party.
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Hundreds of Terms and Concepts
Average Life
Number of years to the point at which half of the principal of the bond will have been retired, which in turn gives an indication as to how fast the principal is expected to amortize.