Bond Finance Resource Center

-Understanding Bond Finance

Bonds are the bedrock of public development finance and serve as the primary source for financing many types of projects, including infrastructure, industrial development, and urban development. This section contains resources on understanding the basics of bond financing.

Read more about Bond Finance

Bonds as a Bedrock of Development Finance Members only

Bond financing remains the bedrock development finance tool for economic development. Seth Crone with The Bank of New York Mellon and Lee McCormick with Community Development Associates discuss how this long-standing tool can be used today to provide a significant portion of a project’s capital stack with a special focus on bond financing programs in Texas. Presenters from bond agencies and capital market firms will walk through bond deals and explore strategies for maximizing the tool throughout the state.

Municipal Bonds - Common Terms Members only

RBC Wealth Management produced this brief glossary explaining some of the more commonly-used terms unique to the municipal bond industry.

Project Finance: Leveraging the Capital Stack

Financing economic development projects through bonds and a combination of other development finance tools is discussed by Jason Rittenberg in this cover story from Development Finance Perspectives, Issue 1 | 2012. The article features project photos submitted by CDFA members.

Built by Bonds

This unique publication from CDFA provides the definitive argument for tax-exempt bond finance, which is a critical tool for American economic development and job creation. Using both qualitative and quantitative analysis, Built by Bonds demonstrates the proven efficiency of tax-exempt bonds.

Bonds and the Basics Members only

Michael Barnes with Saul Ewing gave this overview presentation of tax-exempt bond finance and industrial development bonds.

-Resources

View all Bond Finance Resources

-Private Activity Bonds

Private Activity Bonds (PABs) may be used to address numerous economic development finance needs. They are issued for the benefit of private activities.

New TEFRA Regulations for Qualified Private Activity Bonds Members only

Beginning April 1, 2019, issuers of qualified private activity bonds will be governed by a new set of TEFRA regulations (the Final TEFRA Regulations). The Final TEFRA Regulations, which stem from the Treasury Department’s 2017 Proposed Regulations (REG 128841-07, September 28, 2017), retain many of the procedures and requirements described in the 2017 Proposed Regulations.

IRS Publication 4078: Private Activity Bonds Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

This IRS Publication 4078, Tax-Exempt Private Activity Bonds, provides a revised overview of the general federal tax law rules that apply to qualified private activity bonds.

IRS Publication 5005- Your Responsibilities as a Conduit Issuer of Tax-Exempt Bonds Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

The IRS Publication 5005 provides an overview for state and local governments of the responsibilities of the conduit issuer with respect to the tax compliance in municipal financing arrangements commonly known as conduit financings.

Private Activity Bonds: An Introduction Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

An Introduction to Private Activity Bonds from the Congressional Research Service.

Private Activity Bonds 101 Members only

Bond Finance

Bill Spivey from Florida Development Finance Corporation and Joe Stanton from Broad and Cassel cover the fundamentals of bonds and give a brief overview of the bond market in Florida.

View more PAB Resources

-Types of Private Activity Bonds

The Internal Revenue Code (IRC) permits the financing of several types of facilities using qualified PABs, although they may be used partially or entirely for private purposes:

501(c)(3) Bonds
501(c)(3) Bonds finance projects owned and used by not-for-profit corporations that qualify for exemption under Section 501(c)(3) of the IRC.

Introduction to Qualified 501(c)(3) Bonds Members only

Bond Finance

An Introduction to Qualified 501(c)(3) Bonds Presentations at the Annual Institute on Advising Nonprofit Organizations

IRS Publication 4077: 501(c)(3) Bonds Members only

Bond Finance | Internal Revenue Service (IRS) | Infrastructure Finance

This publication from the IRS describes rules that apply to a particular type of qualified private activity bonds: qualified 501(c)(3) bonds. This Publication also addresses practices and steps an issuer or 501(c)(3) organization can take to protect the tax-exempt status of qualified 501(c)(3) bonds.

View more 501(c)(3) Bond Resources

Industrial Development Bonds
Industrial Development Bonds are issued for qualified manufacturing projects, with a total bond issuance limit of ten million dollars.

Industrial Development Bond Financing Members only

Bond Finance

This resource deals with tax-exempt bond financing. This is a special form of financing available for construction of new manufacturing facilities, for an expansion of existing manufacturing facilities and for rehabilitation of existing manufacturing facilities.

The Power of Private Activity Bonds (PABs) Case Studies: Industrial Development Bonds Members only

Bond Finance

Mr. Russell Goings, III Senior Vice President of Hutchinson, Shockey, Erley & Co. presented the Power of Private Activity Bonds and four industrial development bonds case studies.

View more Industrial Development Bond Resources

Exempt Facility Bonds
Exempt Facility Bonds have a wide scope of use, and implementation varies by state or local government.

IRS Lesson on Exempt Facility Bonds Members only

Bond Finance | Infrastructure Finance | Internal Revenue Service (IRS)

This document from the IRS teaches readers about Exempt Facility Bonds.

Exempt Facility Bonds for Water and Wastewater Infrastructure Members only

Bond Finance | Water Finance

This 1-page issue brief from the Common Ground Alliance discusses how Exempt Facility Bonds can be used to finance water and wastewater infrastructure.

View more Exempt Facility Bond Resources

Qualified Redevelopment Bonds
These bonds are typically issued for projects that involve special district financing, such as Tax Increment Financing (TIF).

Understanding TIF Bond Financing - Lori Trevino Members only

Bond Finance | Tax Increment Finance (TIF)

Lori Trevino with Moody's Investor Services presents on Understanding TIF Bond Financing during the Intro TIF WebCourse.

Tax Increment Bonds Members only

Bond Finance | Tax Increment Finance (TIF)

Michael Stock of Standard & Poor's presents on TIF bonds detailing the rating process, management, legal considerations, volatility ratio and more.

View more Qualified Redevelopment Bond Resources

Aggie Bonds
These bonds are small issue bonds and exist in many states to support agricultural investment.

Beginning Farmer Loan "Aggie Bond" Program Members only

Agriculture Finance | Bond Finance | Food Systems Finance

Tammy Nebola from the Iowa Agricultural Development Division presents on the Aggie-Bond program in Iowa.

Tax-Exempt Bond Financing for Beginning and Low-Equity Farmers: The Case of Aggie Bonds Members only

Agriculture Finance | Bond Finance | Food Systems Finance | Rural Development

Established in the 1980s, the ‘‘Aggie Bond’’ program provides beginning and low-equity farmers with access to capital. The bonds, which pay tax-exempt interest, may be used by qualifying famers for purchases of farm real estate and equipment. The authors use 25 years of data to examine whether the Aggie Bond program has had an impact on farm entrance, land ownership, and the size of operation.

View more Aggie Bond Resources

Green Bonds
Businesses and governments issue green bonds to raise funds for a range of environmental projects.

Financing Low-Carbon Buildings and Energy Efficiency in the Green Bond Market Members only

Bond Finance | Energy Finance | Green Finance | Property Assessed Clean Energy (PACE)

There are substantial opportunities to leverage green bonds to finance low-carbon buildings and energy efficiency in the country. Issuance across the world shows that capital markets can be accessed to finance energy efficiency and buildings. Financing climate adaptation and resilience also presents opportunities.

Growing the U.S. Green Bond Market Members only

The United States’ deteriorating infrastructure is woefully underprepared to address the challenge of adapting to climate change. The funding gap has presented an opportunity for global capital markets to create investment vehicles that provide long-term yield, while also helping communities mitigate or adapt to the effects of global warming. One such vehicle that has arisen in the past decade is the green bond: a traditional fixed income security with an additional layer of environmental sustainability.

View more Green Bond Resources

-Arbitrage & Rebate

IRS Publication 4078: Private Activity Bonds Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

This IRS Publication 4078, Tax-Exempt Private Activity Bonds, provides a revised overview of the general federal tax law rules that apply to qualified private activity bonds.

Advanced Topics in Arbitrage Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

This lesson from the IRS reviews the elements of the different derivative and hedge products used in the municipal market. Derivative structures often involve credit enhancement in various forms. This lesson also reviews the requirements and treatment of qualified guarantees.

Making Something Positive from Negative Arbitrage Re: Public Finance Tax Members only

Bond Finance

Michael Cullers from Squire Patton Boggs writes on arbitrage and how an issuer might be able to derive some benefit from current negative arbitrage by foregoing otherwise available exceptions to yield restriction.

IRS Conference: Arbitrage Yield Restrictions & Rebate Compliance Members only

Bond Finance | Federal | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

The IRS Office of Tax Exempt Bonds provided this presentation on arbitrage yield restrictions and rebate compliance. Topics include an arbitrage overview, filing requirements, and the rebate claims process.

View more Arbitrage & Rebate Resources

-Bond Insurance

Credit Enhancement: Letter of Credit & Bond Insurance Options

Bond Finance

During this webcast our expert panel with Tony Portuondo at BNY Mellon, Steve Eikenberry with First American Bank, Scott Richbourg with Build America Mutual, and Chris Chafizadeh with Assured Guaranty discussed how credit enhancement works, what to expect given current market conditions, and the types of projects that have most successfully utilized bond insurance.

Is Bond Insurance an Option Again?

Bond Finance

The availability of bond insurance has been scarce since about 2007, when bond insurers began to see ratings downgrades during the financial crisis. In fact, at that time, seven bond insurers where triple A rated, but now several are no longer in business and none have maintained their once high ratings. Last July, Build America Mutual (BAM), a new municipal bond insurer, was introduced, and many are wondering if bond insurance has found a new life. During this webcast, we heard Scott Richbourg and Don Farrell of Build America Mutual and Bill Hogan and Chris Chafizedah of Assured Guaranty discuss the latest in bond insurance, if it is a viable option again, and how issuers can access bond insurance if they desire.

View more Bond Insurance Resources

-Credit Enhancement

Letters of Credit (LOC) for Community Development Members only

Bond Finance

Patrick Rutledge, Public Finance Relationship Manager for FHLBank Atlanta, provides an overview of LOCs and discusses opportunities for affordable housing and economic development.

Credit Enhancement: Letter of Credit & Bond Insurance Options

Bond Finance

View more Credit Enhancement Resources

-Deal Structuring

CDFA - PFM Capital Markets Webinar Series: What Your Bond Finance Team Worries About Members only

Bond Finance | Municipal Securities Rulemaking Board (MSRB) | Webcasts

During this webinar, Bethany Pugh, Managing Director at PFM, Todd Fraizer, Managing Director at PFM, Austin McGuan, Director, Stifel Nicolaus & Company, Matthew Eisel, Managing Director at PFM, and Robert McCarthy, Partner with Bricker & Eckler LLP discussed what bond finance teams across the country worry about.

View more Deal Structuring Resources

-Post-Issuance Compliance

CDFA - PFM Capital Markets Webinar Series: What Your Bond Finance Team Worries About Members only

Bond Finance | Municipal Securities Rulemaking Board (MSRB) | Webcasts

CDFA - PFM Capital Markets Webinar Series: Regulatory Landscape with MSRB and SEC Framework Members only

Bond Finance | Municipal Securities Rulemaking Board (MSRB) | Webcasts | U.S. Securities and Exchange Commission (SEC)

This session discussed the recent amendments and how to prepare. The discussion included insights and reminders about how to remain compliant in all areas from main regulatory bodies for bond financing in the capital markets. Speakers on this session included Teri Guarnaccia with Ballard Spahr LLP, Leo Karwejna with Public Financial Management, and Julia Cooper with the City of San Jose.

2019 Proposed Bond Reissuance Regulations Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

The Department of the Treasury's IRS released new Proposed Regulations regarding Bond Reissuance. The Proposed Regulations address the subject of “reissuance” in connection with issues of tax-exempt obligations. The Proposed Regulations generally follow the guidance set forth in IRS Notice 2008-41, 2008-1 CB 742.

IRS Publication 4078: Private Activity Bonds Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

This IRS Publication 4078, Tax-Exempt Private Activity Bonds, provides a revised overview of the general federal tax law rules that apply to qualified private activity bonds.

IRS Publication 5005- Your Responsibilities as a Conduit Issuer of Tax-Exempt Bonds Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

View more Post-Issuance Compliance Resources

-Rating Agencies

CDFA - PFM Capital Markets Webinar Series: Regulatory Landscape with MSRB and SEC Framework Members only

Bond Finance | Municipal Securities Rulemaking Board (MSRB) | Webcasts | U.S. Securities and Exchange Commission (SEC)

Management Capacity and State Municipal Bond Ratings: Evidence With the GPP Grades Members only

Bond Finance

This study, authored by Jerry Zhao and David Guo, finds that states with higher GPP grades tend to have higher state GO bond ratings, but the relationship may be nonlinear as people are more sensitive to the extremes of perceived performance. In particular, the researchers observe a “performance premium” scenario in which S&P bond ratings grow at an increasing rate as state GPP grades improve.

View more Rating Agencies Resources

-Rules and Regulations

CDFA - PFM Capital Markets Webinar Series: What Your Bond Finance Team Worries About Members only

Bond Finance | Municipal Securities Rulemaking Board (MSRB) | Webcasts

New TEFRA Regulations for Qualified Private Activity Bonds Members only

Bond Finance | Federal | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

CDFA - PFM Capital Markets Webinar Series: Regulatory Landscape with MSRB and SEC Framework Members only

Bond Finance | Municipal Securities Rulemaking Board (MSRB) | Webcasts | U.S. Securities and Exchange Commission (SEC)

2019 Proposed Bond Reissuance Regulations Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

IRS Publication 4078: Private Activity Bonds Members only

Bond Finance | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

This IRS Publication 4078, Tax-Exempt Private Activity Bonds, provides a revised overview of the general federal tax law rules that apply to qualified private activity bonds.

View more Rules and Regulation Resources

-Volume Cap Map and Database

CDFA Volume Cap Resource Center

The CDFA Volume Cap Resource Center allows users to search, sort, and compare comprehensive private activity bond volume cap data from all 50 states and the District of Columbia dating back to 2005.

Visit the CDFA Volume Cap Resource Center

How the Cap Is Used

-Case Studies

CDFA Food Systems Finance Best Practices Guidebook

Linking development finance and food systems can be a daunting undertaking for any community. Research on the current ecosystem of food systems finance has positioned CDFA to identify key strategies for the path ahead in this work. The Food Systems Finance Best Practices Guidebook defines how traditional development finance tools can be used to launch and expand food and agricultural-related businesses and projects, and create successful food systems finance programs at the local and regional levels.

Limits of Disclosure Regulation in the Municipal Bond Market

Bond Finance | Economic Development

Using a novel data set on municipal private debt disclosures, the authors of this academic research study the effectiveness and market impact of disclosure regulation in the municipal debt market. By comparing reportable private debt events to the universe of realized disclosures, we find evidence that issuers significantly underreport private debt.

State of the Market 2021 - Climate Bonds Initiative Members only

This is the first State of the Market Report for North America. This report describes the shape and size of labelled green, social and sustainability (GSS) debt issued by entities domiciled in either the USA or Canada extending to the end of March 2021 (Q1 2021).

CDFA // BNY Mellon Development Finance Webcast Series: Bond Financing for Disaster Response

During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, we looked at how bonds act as a resilient economic driver by financing the critical facilities and infrastructure that stabilize local economies during and after crises.

CDFA Charter Schools Financing Initiative: Development Finance Strategies for Charter Schools

CDFA's first publication of the CDFA Charter Schools Financing Initiative series, funded with support from the National Alliance For Public Charter Schools. This paper demonstrates how charter schools can access development finance tools and public finance and provides real-world examples of how these tools have been successfully implemented.

View more Case Studies

-Headlines

United Airlines’ $1B Junk Muni Deal Offers a Bond Bargain
yahoo!finance | Nov. 20 | Bond Finance | Community Development | Economic Development

Bond Vote on Financing Florida Ray's Stadium Remains Up in the Air
Spectrum News | Nov. 19 | Bond Finance | Community Development | Economic Development

View more Headlines

-Publications

Development Bond Finance Reference Guide

Bond Finance

The Development Bond Finance Reference Guide provides practitioners with a solid foundation for understanding the use of tax-exempt bonds, with an emphasis on small issue industrial development bonds and 501(C)(3) bonds. With numerous examples of sample bond transactions and a glossary of municipal finance terms, this guide covers the essential elements of private activity bonds and the issuance process.

Advanced Bond Finance Reference Guide

Bond Finance

The Advanced Bond Finance Reference Guide is written for professionals who already have an understanding of tax-exempt financing and seek detailed instruction on complex financing techniques, including the application of financial derivatives, advance refundings, how to spot arbitrage issues, and investing bond proceeds. Also included are seven case studies of proven state and city bond guaranty programs.

Practitioner's Guide to Economic Development Finance

The Practitioner's Guide to Economic Development Finance 2nd Edition is the only comprehensive resource dedicated to building and utilizing the development finance toolbox. The Practitioner's Guide provides the insight and practical information needed to critically understand how economic development is financed and the tools, strategies and techniques used to build strong communities. From bonds, tax increment finance and special districts to tax credits, seed & venture capital, revolving loan funds and much more, this Guide outlines the financing tools required for succeeding in today's competitive economic development climate.

Unlocking Capital: A Handbook for Becoming a High Performing Development Finance Agency

Unlocking Capital: A Handbook for Becoming a High Performing Development Finance Agency (Handbook) serves as a companion to the Practitioner’s Guide to help illuminate the structures of development finance agencies (DFAs), essential conduits to access development finance tools. The Handbook provides an overview of DFAs and their myriad roles in various development efforts. Included in this discussion is a comprehensive look at over a dozen high-performing DFAs throughout the country. The Handbook is designed to be a starting point for local leaders to engage in the creation or acceleration of a DFA to build and utilize the development finance toolbox.

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-Upcoming Events

CDFA // BNY Development Finance Webcast Series: Exploring Common Bond Reserve Funds
December 17, 2024
2:00 PM - 3:00 PM Eastern

During this installment of the CDFA // BNY Development Finance Webcast Series, local practitioners will present their Common Bond Reserve Fund program models to demonstrate the potential of this innovative pathway for increasing access to capital.

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-Webcasts

CDFA // BNY Development Finance Webcast Series: Bond Financing for Manufacturers & Non-Profits

Bond Finance | Webcasts

During this installment of the CDFA // BNY Development Finance Webcast Series, panelists tap into the core principles of tax-exempt financing for manufacturers and 501(c)(3) organizations, covering key aspects such as eligible issuers, assets, and projects, private business use test, and best practices.

CDFA // BNY Development Finance Webcast Series: Bond Rating Roundtable

Bond Finance | Webcasts

During this installment of the CDFA // BNY Development Finance Webcast Series, speakers from various credit rating agencies discuss their rating criteria and methodology. The discussion also encompass factors influencing bond ratings, along with case studies highlighting projects that experienced positive outcomes due to improved bond ratings.

CDFA // BNY Development Finance Webcast Series: Exploring New IIJA Bond Categories

Bond Finance | Webcasts

During this installment of the CDFA // BNY Development Finance Webcast Series, panelists provide an overview of these two new categories and illustrate how they might be better utilized in communities across the country.

CDFA // BNY Mellon Development Finance Webcast Series: Financing Charter Schools with Social Bonds

Bond Finance | Webcasts

During this installment of the CDFA // BNY Development Finance Webcast Series, panelists discuss how social bonds can be used to provide low-interest loans to high-performing public charter schools to provide transformative educational opportunities for students.

CDFA // BNY Development Finance Webcast Series: Navigating ESG in the Bond Market

Bond Finance | Webcasts

During this installment of the CDFA // BNY Development Finance Webcast Series, panelists discuss ESG principles, how they have impacted the bond market, what role they play in the larger financial market, and where they see those impacts continuing in 2024 and beyond.

View more Webcasts