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CDFA Bond Finance Update - January 15, 2019

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Bond Finance Update
January 15, 2019
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CDFA Bond Finance Update


AFICA Issues Bonds in PR for First Time in Over a Decade
The Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority (AFICA) issued $9M in new bonds to finance the construction and development of a library, a science center and other improvements for Baldwin School of Puerto Rico. It is the first AFICA issue for a new investment since the early 2000s.

IRS Releases New TEFRA Regulations on PABs
The IRS released regulations regarding the requirements for public notice, hearing, and approval of qualified private activity bonds. The Final TEFRA Regulations replace temporary regulations under the Internal Revenue Code of 1954 by finalizing rules set forth in proposed regulations issued in 2017 with a few notable improvements and clarifications.

2019 Proposed Bond Reissuance Regulations
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.

AK Judge Rules on Constitutionality of Tax Credit Bonds
The small oil companies and banks holding more than $800M in refundable tax credits scored a victory when an AK Superior Court judge threw out a lawsuit challenging the state's plan to sell bonds to pay off those credits. State attorneys successfully contended the plan is legal because the bonds would be "subject to appropriation" by the Legislature.

Muni Market Gains Sympathetic Ear on Tax Policy
The legislative outlook for the tax treatment of municipal bonds is brighter in 2019 than a year ago with a strong supporter of municipal bonds ascending to the chairmanship of the Ways and Means Committee as part of the new Democratic majority. Rep. Richard Neal begins serving with a pledge to ask municipal market advocates to testify on the impact of the TCJA.

Should Pensions Own Utilities? Congress Has Considered It Before
In 2018, a proposed House bill would have cleared the way for pensions to buy municipal assets, such as water and sewer authorities. The idea has advantages for pensions and is likely to be attractive to governments with major pension funding issues. With infrastructure likely to be a top priority in the new Congress, similar ideas may gain traction in 2019.

Three Ways Tax Reform Has Impacted the Muni Market
The impact of the federal tax overhaul on the municipal bond market hasn't been as bad as many feared, but the elimination of advanced refunding bonds has reduced the overall supply of municipal bond offerings. While banks are retreating from the muni market, taxpayers in high-tax states are sheltering more of their income in municipal bonds.

Market Reports

Weekly Capital Markets Update
Wye River Group | Jan. 15 | Bond Finance | Bond Finance\Market Reports

Weekly Rate Update
KPM Financial | Jan. 14 | Bond Finance | Bond Finance\Market Reports

Weekly Market Outlook
Moody's Analytics | Jan. 10 | Bond Finance | Bond Finance\Market Reports

Upcoming Events
Fundamentals of Economic Development Finance WebCourse

CDFA - PFM Capital Markets Webinar Series
November 28, January 10, February 7, March 14, April 16, May 7 - Monthly: 2:00 - 3:30 PM Eastern
The Webinar Series will feature the industry's top leaders discussing case studies, challenges, opportunities and critical issues in today's capital markets. Topics covered include bond market insights, understanding the regulatory environment, refunding and structuring strategies, effects of tax reform, and tips for engaging municipal advisors.

News from The Bond Buyer

The latest municipal finance headlines from The Bond Buyer.

BABs Subsidies Continue During Spending Deadlock
Build America Bond issuers are receiving their interest subsidy payments during the partial government shutdown while Congress remains divided on how to resolve the deadlock. Federal subsidy payments made to issuers of BABs and other direct-pay bonds have been cut by 6.2% in fiscal 2019 under sequestration.

Climate Change Affecting the Muni Market
Portfolio managers are feeling the heat when it comes to investing in bonds that could potentially be affected by climate change. Climate change has long been a point of political and social contention, and investors are throwing caution to the wind when making important bond transactions, while using a green thumb to do their part.

Tampa Bay Rays Stadium Plan Strikes Out
The Tampa Bay Rays say the baseball team's deal for a new stadium near downtown Tampa is dead. The Rays abruptly rejected the framework for funding a new $900 million ballpark in Tampa's Ybor City neighborhood near downtown, saying that financing and other details weren't thorough enough with the clock running out on the deadline to make a decision.

CDFA is proud to partner with The Bond Buyer as our Official Media Sponsor. Read more about this partnership and all of its benefits here.

Bond Finance Headlines

Rochester, NH Approves TIF Bonding Increase and Funding for Projects
GateHouse Media | Jan. 11 | Bond Finance | Tax Increment Finance (TIF)

Plan to Replace Richmond, VA Arena Encounters Financing Troubles
Richmond Free Press | Jan. 7 | Bond Finance | Tax Increment Finance (TIF)

Treasury Releases Final PAB Public Approval Regulations
National Law Review | Jan. 7 | Federal | Internal Revenue Service (IRS) | U.S. Dept. of Treasury

Boulder City, NV Gets $12.4M for Complete Streets Project
Boulder City Review | Jan. 4 | Bond Finance | Infrastructure Finance

New York, NY Medical Facility Scores $132M in Bonds
GlobeSt.com | Jan. 4 | Bond Finance

MassDevelopment Issues Bond to Support College Science Center
Boston Globe | Jan. 2 | Bond Finance | Member News

Current Issues in Community Solar Projects
Norton Rose Fulbright | Dec. 27 | Bond Finance | Energy Finance | Green Finance

Intel Seeks $300M in Bonds for OR Water Project
The Oregonian | Dec. 22 | Bond Finance | Water Finance

Terre Haute, IN Closes on $63M Sewer Bond
Tribune Star | Dec. 22 | Bond Finance | Revolving Loan Funds (RLFs) | U.S. Environmental Protection Agency (EPA) | Water Finance

The Council of Development Finance Agencies is a national association dedicated to the advancement of development finance concerns and interests. CDFA is comprised of the nation's leading and most knowledgeable members of the development finance community representing public, private, and non-profit entities alike. For more information visit CDFA.net or email info@cdfa.net

For more information about sponsoring one of CDFA's electronic newsletters, please contact CDFA or call 614-705-1300.

Council of Development Finance Agencies
100 E. Broad Street, Suite 1200
Columbus, OH 43215
(614) 705-1300

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