A coalition of public finance groups is lobbying hard for House and Senate conferees working on a long-term highway bill to include a provision that would temporarily increase the limit for bank-qualified bonds.
The bank-qualified bond provision, included in the Senate-approved two-year, $109 billion bill, would allow banks to deduct 80% of the cost of buying and carrying tax-exempt bonds sold by issuers whose annual issuance is $30 million or less from June 30, 2012, to July 1, 2013. That would be a significant increase from the current $10 million limit, which has been in place since 1986.
The letter’s signatories contend that the failure to even index that limit to inflation has dramatically reduced the ability of small issuers to gain market access. Michael Decker, managing director of muni securities at SIFMA, said the temporary increase of the limit under the American Recovery and Reinvestment Act during 2009 and 2010 made a big difference for those smaller issuers.
Read more at the Bond Buyer online.