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

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.

Conduit Financing

Financing in which the Issuer issues the bonds to finance a project to be used primarily by a third party.

Hudson Yards Rail Yards

Start with the Bond Basics

Conduit Bonds

Bonds issued by an Issuer in a conduit financing.