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Bond Finance Resource Center

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Bonds are the bedrock of public development finance. They have been used to help build roads, bridges, sewers, dams, and thousand of other public and private projects. Bonds are issued and sold to the investing public by governmental entities to finance both governmental activities and the development of physical infrastructure and local economies.


There are two types of bonds: Government Bonds (GOs) and Private Activity Bonds (PABs). GOs may be used for many public purposes (e.g., highways, schools, bridges, sewers, jails, parks, government equipment and buildings, etc.). Private entities may not significantly use, operate, control, or own the facilities that are being financed. GOs benefit the general public, while PABs benefit private entities. PABs are the development finance mechanisms that drive projects involving both the public and private sector.


The CDFA Bond Finance Resource Center contains development finance tools that can be used to better understand the essentials of bond finance. Over 50,000 individual governments and authorities around the country issue bonds and the Bond Finance Resource Center is a comprehensive clearinghouse of information, case studies, and educational materials on the uses and function of bonds.


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-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

Basics of Bond FinanceMembers only Login
James Hamill from the California Statewide Communities Development Authority presents on the basics of bond financing.
Bedrock Tools: Everything You've Always Wanted to Know About BondsMembers only Login
Bob Swanger of Stern Brothers & Co. elaborates on the essentials of bonds.
Bonds as a Bedrock of Development FinanceMembers only Login
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 TermsMembers only Login
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.

-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 BondsMembers only Login
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 5005- Your Responsibilities as a Conduit Issuer of Tax-Exempt BondsMembers only Login
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 IntroductionMembers only Login
An Introduction on Private Activity Bonds from the Congressional Research Service
Private Activity Bond Case StudiesMembers only Login
Brandon Lewis from Public Financial Management presents on private activity bond case studies.
IRS Publication 4078: Private Activity BondsMembers only Login
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 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:

-Arbitrage & Rebate

Arbitrage Rebate and Calculating YieldMembers only Login
Kristen Kalinowski from BNY Mellon presents on arbitrage, rebate and calculating yield in bond transactions.
Advanced Topics in ArbitrageMembers only Login
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.
IRS Publication 4078: Private Activity BondsMembers only Login
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.
Making Something Positive from Negative Arbitrage Re: Public Finance TaxMembers only Login
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 ComplianceMembers only Login
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

Bond Insurance for Credit EnhancementMembers only Login
Mary Francoeur of Assured Guaranty reviews forms of credit enhancement specifically focusing on bond insurance and the value proposition.
Bonds, Bond Documents and Financing StructuresMembers only Login
Arthur Cohen of Hawkins Delafield & Wood LLP presents the basics of bond finance, including key documents and players, credit enhancement, and deal structuring for the Fundamentals WebCourse.
Bond InsuranceMembers only Login
John Hallacy with Assured Guaranty provides a comprehensive overview of bond insurance, why it is a viable option, economics, and insight on the insurance market.
Credit EnhancementMembers only Login
Robert Swanger and Joseph Riley of Stern Brothers & Co. go over the various forms of bond credit enhancement touching on letters of credit, guarantees, insurance, and more.
Credit Enhancement: Letter of Credit & Bond Insurance Options
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.
View more Bond Insurance Resources

-Credit Enhancement

The Partners Involved: The CreditorMembers only Login
Richard Raphael of Verify Financial discusses the role of the creditor in bond financing.
Credit EnhancementMembers only Login
Tyler Hoch of Stifel and Steve Eikenberry of First American Bank present on credit enhancement in bond deals.
Bond Insurance for Credit EnhancementMembers only Login
Mary Francoeur of Assured Guaranty reviews forms of credit enhancement specifically focusing on bond insurance and the value proposition.
Bonds, Bond Documents and Financing StructuresMembers only Login
Arthur Cohen of Hawkins Delafield & Wood LLP presents the basics of bond finance, including key documents and players, credit enhancement, and deal structuring for the Fundamentals WebCourse.
Letters of Credit (LOC) for Community DevelopmentMembers only Login
Patrick Rutledge, Public Finance Relationship Manager for FHLBank Atlanta, provides an overview of LOCs and discusses opportunities for affordable housing and economic development.
View more Credit Enhancement Resources

-Deal Structuring

The Partners Involved - Lisa HaganMembers only Login
Lisa Hagan with Hawkins Delafield & Wood presents on the Partners Involved.
CDFA - PFM Capital Markets Webinar Series: What Your Bond Finance Team Worries AboutMembers only Login
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.
Structuring The Deal: Sizing A Bond IssueMembers only Login
Tina Neal, Principal at Perseverance Capital Advisors LLC, discusses the financial feasibilities of potential bond projects.
Bonds, Bond Documents and Financing StructuresMembers only Login
Arthur Cohen of Hawkins Delafield & Wood LLP presents the basics of bond finance, including key documents and players, credit enhancement, and deal structuring for the Fundamentals WebCourse.
Structuring the Deal-Combining and Leveraging Other Tools With BondsMembers only Login
Enzo Incandela, attorney with Ice Miller, gives information on combining bonds with existing tools such as TIF, SBA 504 loans, and special assessment districts to fill gaps.
View more Deal Structuring Resources

-Post-Issuance Compliance

CDFA - PFM Capital Markets Webinar Series: What Your Bond Finance Team Worries AboutMembers only Login
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.
CDFA - PFM Capital Markets Webinar Series: Regulatory Landscape with MSRB and SEC FrameworkMembers only Login
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 RegulationsMembers only Login
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 5005- Your Responsibilities as a Conduit Issuer of Tax-Exempt BondsMembers only Login
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.
Primer On Monitoring Post-Issuance ComplianceMembers only Login
This audio cast from the IRS covers the importance of implementing post-issuance compliance procedures and regularly monitoring those procedures to preserve the status of tax-advantaged bonds over the entire life of the bonds. Tax-advantaged bonds, includes tax-exempt bonds, tax credit bonds, and direct-pay bonds.
View more Post-Issuance Compliance Resources

-Rating Agencies

CDFA - PFM Capital Markets Webinar Series: Regulatory Landscape with MSRB and SEC FrameworkMembers only Login
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.
The Partners Involved: Rating AgencyMembers only Login
John Sauter from S&P Global Ratings presents from the rating agencys' perspective in a bond deal.
The Partners Involved: The Role of the Rating AgencyMembers only Login
Daniel Simpson from Moody's Investor Services presents on the role of the rating agency in bond deals.
The Ratings AgenciesMembers only Login
Chris Valtin of Fitch Ratings discusses bond ratings: what they are, what they mean, and how they are acquired.
Management Capacity and State Municipal Bond Ratings: Evidence With the GPP GradesMembers only Login
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 AboutMembers only Login
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.
New TEFRA Regulations for Qualified Private Activity BondsMembers only Login
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.
CDFA - PFM Capital Markets Webinar Series: Regulatory Landscape with MSRB and SEC FrameworkMembers only Login
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 RegulationsMembers only Login
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 5005- Your Responsibilities as a Conduit Issuer of Tax-Exempt BondsMembers only Login
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.
View more Rules and Regulation Resources

-Volume Cap Map

How the Cap Is Used

-Case Studies

The World Bank - Green Bond Impact Report 2019Members only Login
The World Bank's 2019 Green Bond Impact Report shows investors how we are working with our member countries to support their climate finance efforts and deliver results, on a project-by-project basis.
Bond Financing for Healthcare & Housing Projects - John Wooten, Philip Angelo, Colin Kalvas, Ryan Kozak, Dennis ReillyMembers only Login
John Wooten, Philip Angelo, Colin Kalvas, Ryan Kozak, and Dennis Reilly present Bond Financing for Healthcare & Housing Projects
Bond Financing Case Studies - Samuel BozzollaMembers only Login
Samuel Bozzolla with Allegheny County Economic Development presents on Bond Financing Case Studies.
Regional Resilience Toolkit: 5 Steps to Build Large Scale Resilience to Natural DisasterMembers only Login
Cities, regions, and states across the country are facing natural disasters that can have devastating effects on life, property, the economy, and ecosystems. Climate change is already having observable effects on the environment, and past conditions are no longer a reliable indication of the type or extent of disasters communities will face in the future.
BNY Mellon: Why Municipal Revenue Over General Obligation BondsMembers only Login
When investing within the large, diverse municipal bond market with $4.0 trillion of municipal debt outstanding and over 50,000 issuers, investors must generally choose between two broad categories of bonds: revenue and general obligation (GO). Both represent high-quality investments; however, there are several reasons why BNY Mellon favors revenue over GO bonds.
View more Case Studies

-Headlines

-Publications

Development Bond Finance Reference Guide
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
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.
View more Publications

-Training Courses

The Fundamentals of Economic Development Finance Course is the foundation for all of CDFA’s educational offerings. This course will help you understand the variety of development finance tools available, from bonds, tax credits and TIF, to federal financing programs, RLFs, and access to capital lending resources.

The Intro Bond Finance Course provides an in-depth look at governmental and qualified private activity bonds, with a focus on industrial development bonds (IDBs), 501(c)(3) non-profit bonds, exempt facility bonds, and other special bond programs authorized by the federal government.

The Advanced Bond Finance Course is designed 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, investing bond proceeds and how to spot arbitrage issues. This course is an ideal opportunity to enhance your knowledge and maximize your community's ability to finance economic development using tax-exempt bonds.

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-Upcoming Events

CDFA // BNY Mellon Development Finance Webcast Series: Forecasting the Bond Market in 2020
Tuesday, January 21, 2020
1:00 PM Eastern
During this installment of the CDFA // BNY Mellon Development Finance Webcast, hear from our experts as they dive into the data, examine the trends, and offer a preview of the bond market in 2020.
Register
Fundamentals of Economic Development Finance WebCourse
January 29-30, 2020
Daily: 12:00 - 5:00 PM Eastern
The Fundamentals WebCourse is the foundation for all of CDFA’s educational offerings. This course helps attendees understand the variety of development finance tools available, from bonds, tax credits and TIF, to federal financing programs, RLFs, and access to capital lending resources.
Register
Intro Bond Finance WebCourse
February 26-27, 2020
Daily: 12:00 - 5:00 PM Eastern
The Intro Bond Finance WebCourse provides an in-depth look at governmental and qualified private activity bonds, with a focus on industrial development bonds (IDBs), 501(c)(3) non-profit bonds, exempt facility bonds, and other special bond programs authorized by the federal government.
Register
CDFA Federal Policy Conference
April 14-15, 2020
Washington, DC
The federal government plays a critical role in driving private and public investment in innovation, job creation, infrastructure, and community development. With the 2020 presidential election quickly approaching, development finance will be a key policy issue across the nation. The 116th Congress will also play a major role in shaping our country’s economic development policy going forward. It's up to the development finance community to focus the national discussion on smart federal policy, and CDFA is the voice of the economic development finance community on Capitol Hill. For these reasons, CDFA will host its CDFA Federal Policy Conference on April 14-15 in Washington DC.
Register
View more Upcoming Events

-Webcasts

CDFA // BNY Mellon Webcast Series: Analysis of the 2018 CDFA Volume Cap Report and Capital Markets ReviewMembers only Login
The annual CDFA Volume Cap report is an essential outline of national private activity bond issuance trends and is used by issuers, researchers, trade groups, and political offices to understand the private activity bond landscape. During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, we examined the recently released 2018 Volume Cap Report in fine detail as well as discussed the fourth-quarter outlook of the capital markets.
CDFA // BNY Mellon Webcast Series: Conduit Bond Fees - A Look Behind the NumbersMembers only Login
As the bond market changes, bond issuers must work diligently to keep their fee structures up to date. During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, we looked beyond the fee structures and broke down the philosophies behind them, with the goal of sharing innovative thinking throughout the bond industry and provide a qualitative look behind CDFA’s Conduit Bond Fee Study.
2019 Q2 CDFA Quarterly Legislative Update
In the second Quarterly Legislative Update of 2019, CDFA's Legislative Team discussed progress on pending CDFA legislation, other pending development finance legislation such as extenders, as well as what to expect from Congress in the coming months.
CDFA // BNY Mellon Webcast Series: The Landscape of Mega Project InitiativesMembers only Login
During this installment of the CDFA // BNY Mellon Webcast Series, expert speakers from CAI Global, Baltimore Development Corporation, Arlington Economic Development, and VEDP provided an in-depth overview of the approaches being used by cities, counties, and states to attract mega projects like Amazon HQ2 and Under Armour.
CDFA - PFM Capital Markets Webinar Series: What Your Bond Finance Team Worries AboutMembers only Login
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 Webcasts

CDFA National Sponsors

  • Alaska Industrial Development and Export Authority
  • Baker Tilly Virchow Krause
  • BNY Mellon
  • Bricker & Eckler LLP
  • Bryan Cave Leighton Paisner LLP
  • Business Oregon
  • CohnReznick
  • FBT Project Finance Advisors LLC
  • Fifth Third Bank
  • Frost Brown Todd, LLC
  • Hawkins Delafield & Wood LLP
  • Ice Miller LLP
  • KeyBanc Capital Markets
  • Kutak Rock LLP
  • McCarter & English, LLP
  • McGuireWoods
  • MuniCap, Inc.
  • NW Financial Group, LLC
  • Petros PACE Finance
  • SB Friedman Development Advisors
  • Stern Brothers
  • Stifel Nicolaus
  • U.S. Bank
  • Wells Fargo Securities
  • Wilmington Trust
  • Z. The Bond Buyer
Become a Sponsor