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Article: Higher QZAB Tax-Credit Rate Cuts Issuers' Borrowing Costs.(Qualified Zone Academy Bonds)
- Article from:
- The Bond Buyer
- Article date:
- July 7, 1999
- Author:
CopyrightCOPYRIGHT 1999 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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WASHINGTON -
The new, higher tax-credit rate for Qualified Zone Academy Bonds should make the program more attractive to issuers by bringing their cost of borrowing closer to zero for the taxable securities, but the program still faces other problems, like liquidity and complexity concerns, sources said.
The professionals working on at least two QZAB transactions said the Treasury Department's move last week to raise the tax-credit rate should mean investors will be able to cover their cost of funds without issuers having to pay additional interest or other premiums.
Arthur E. Anderson, a partner at McGuire Woods Battle & Boothe in Richmond, ...