National Association of Bond Lawyers (NABL) proposes special issue price rules for competitive deals
Ken Artin, president of the National Association of Bond Lawyers (NABL), was recently quoted in The Bond Buyer numerous times about the possibility of the Treasury Department and the Internal Revenue Service creating more lenient issue price rules for competitive bond transactions.
“An underwriter has much less ability, and thus no incentive, to not price the bonds fairly and correctly in a competitive bid situation,” said Artin, in a letter to the Treasury Department and the Internal Revenue Service.
In the letter, Artin also stated that “the IRS should be encouraging competitive deals.”
“A lot of issuers have to do competitive bids and given the nature of the beast, the safe harbor makes sense.” Artin said that NABL proposed that small issuers be exempted from the three-bid requirement after finding that some seek competitive bids for issues as small as $500,000 of bonds. “They’re just not going to attract the number of bids that the larger issuers are, so we didn’t want to penalize them,” he said.
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