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13 Cards in this Set
- Front
- Back
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Temporary Period |
1. Expenditure test 2. Time test 3. Due diligence test Must meet all three tests This is an execption to yeild restrictions |
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Expenditure Test |
85% of bond proceeds spent on capital projects within three years of issuanec |
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Time Test |
Issuer obligation to spend at least 5% of proceeds on capital progects within 6 months of issuance |
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Due diligence test |
Issuer has reasonable expectation that 100% of proceeds will be spent and project will be completed (3 years) |
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Yield restriction exceptions |
1. Temporarry period 2. Reserve fund exception 3. exception for a minor portion |
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Exception for reserve fund |
1. 10% of gross proceeds of bond issue many be placed in reserve or replacement fund without yield restrticitons |
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Exception for a minor portion |
1. Lesser of 5% or $100,000 may be invested without yield restrictions |
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Arbitrage rebate exceptions |
1. spending calenders (6 month, 18 months, 2 years) 2. Small issuer exception 3. bona finde debt service fund exception |
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6 month exception |
100% of bond proceeds spent within 6 months |
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18 month exception |
15% in 6 months 60% in 1 year 100% in 18 months |
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2 year exceptions |
75% of total proceeds must be used for construction projects 10% in 6 monhts 45% in 1 year 75% in 18 months 100% in 2 years |
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Small issuer exception |
lesser of $5 million of governmental bonds ($15 million for public school construction) issued per year |
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Bona fide debt service fund |
A fund that is primarily used to match revenues with debt service payments and is depleted each year, except for a reasonably small amount |
