Post-Issuance Compliance Management
There are numerous compliance requirements that issuers and conduit borrowers must deal with after closing a new bond issue. The broader context of “post-issuance compliance” generally includes:
Developing appropriate policies & procedures
Investing bond proceeds appropriately
Ensuring that bond proceeds are spent on qualified purposes
Adhering to arbitrage rebate and yield restriction requirements
Monitoring the use of bond financed facilities
Retaining required records
In recent years, the Tax Exempt Bond division of the Internal Revenue Service (“TEB”) has increased its scrutiny of post-issuance tax compliance through an intensified audit work program focusing on tax advantaged bonds. TEB also issued compliance check questionnaires to hundreds of issuers and revised IRS Form 990 to solicit detailed information from 501(c)(3) issuers regarding their tax-exempt debt.
The SEC is also pushing for more regulation of the municipal market, and has recently ramped up its enforcement efforts around the continuing disclosure requirements of Rule 15c2-12 of the Securities Exchange Act of 1934. For example, the SEC’s Municipalities Continuing Disclosure Cooperation Initiative (MCDC) that was announced on March 10, 2014, served as a wake-up call to industry participants about the need to shore up continuing disclosure practices.
Due to the evolving regulatory landscape, issuers and conduit borrowers of tax advantaged debt must find an effective way to manage the myriad challenges of post-issuance compliance or risk very costly consequences.
At Avant, we believe that issuers and obligors who proactively manage their compliance requirements from a global perspective are better positioned to respond to regulatory demands while reducing the overall cost of compliance. Because a complex problem requires a smart solution, Avant has developed a robust, web-based platform for helping clients manage all aspects of post-issuance compliance both effectively and efficiently: BondIQ.
Please contact us to learn more about how BondIQ can help your organization manage post issuance compliance more effectively.
Avant’s team has been performing arbitrage calculations for over 25 years, and traces its roots back to Arthur Andersen’s Municipal Bond Services Group. Over the years, our experienced team of professionals has been exposed to a full range of complex tax-advantaged financing structures in a variety of industries, including: state and local governments, public utilities, transportation, multi- and single-family housing, education, and healthcare. As a result, Avant has the requisite knowledge and experience to serve any issuer or conduit borrower at the highest level.
Our focus as service providers is to emphasize excellent customer service and cost savings, so our clients get more than just a relevant, high quality arbitrage rebate report. We develop a strategic approach tailored to each clients’ specific needs and circumstances. And at the end of each calculation cycle, we consult with them to address identified opportunities and/or risks, so that resulting strategies are incorporated in future calculation cycles and bond transactions. All of this is provided as part of our standard fee structure.
Our standard report includes a comprehensive summary of arbitrage yield, rebate, and yield restriction liabilities. We provide a complete discussion and explanation of our approach, as well as detailed schedules and sub-schedules. In every case, we prepare a report that is concise, relevant, and tailored to our client.
Avant offers services designed to help issuers, obligated persons, and underwriters comply with continuing disclosure obligations related to SEC Rule 15c2-12. Such services include:
Disclosure compliance audits
Establishing effective processes and procedures for continuing disclosure
Assistance with preparing and delivering required disclosures
Other Related Services
Avant Strategic Partners offers value-added consulting services with a focus on delivering bottom line results. We go out of our way to learn and understand our clients’ businesses so that we can better serve their needs—often before they even know they have them! Because we truly view our clients as business partners, we proactively share industry best practices and innovative new solutions that bring them value.
Additional consulting services offered by Avant include, but are not limited to:
Compliance assessments of conduit borrowers
Preparation and support of refund claims
Support of clients under IRS examination
Management of settlements under the IRS’s Voluntary Closing Agreement Program (VCAP)
Process improvement and documentation