Bryant Miller Olive attorney George Smith spoke with Governing Magazine about the impact of reducing the corporate tax rate on local municipalities existing bank loans.
According to Smith many existing bank loans have triggers in place allowing banks to hike interest rates if the corporate tax rate is lowered. Depending on how the deal is structured, these changes could go into effect immediately, but in other instances increasing the loans’ interest rate could fall to the discretion of the bank.
Smith recommends municipalities spend time looking over their existing bank loans now to see what the financial impact would be and what their options are. In some instances, they may be able to negotiate a rate with banks or it may be beneficial to refinance out of the initial loan.
Learn more by reading the full article here.