WASHINGTON - The Internal Revenue Service is auditing economic development revenue bonds issued by St. Joseph County, Ind. in 2007 for Saint Mary's College.

The IRS notified the issuer of the audit on Sept. 17. The Corporation of Saint Mary's College, the nonprofit borrower of the bond proceeds that owns and operates the school, disclosed the audit in an event notice posted on the Municipal Securities Rulemaking Board on Monday.

The main purpose of the audit is to "ascertain the compliance of the bonds with the federal tax requirements applicable to qualified 501(c)(3) bonds," the event notice said. The IRS' said in its notice about the audit that it had no reason to believe there are any tax-law violations at this time, according to the borrower.

Saint Mary's College is a Catholic women's college located adjacent to the campus of the University of Notre Dame. It has about 1,500 students, according to the official statement and the college's website.

St. Joseph County issued roughly $37.95 million of bonds in 2007 for the college. Some of the bonds have since matured, based on the official statement.

Proceeds of the bonds were to be used to finance the construction of and improvements to several of economic development projects on the campus, including landscaping. They were also to be used to advance refund some bonds previously issued in 1998 and 2002 as well as to current refund the April 2007 interest payment on the portion of the 1998 bonds that were not to be advance refunded, the borrower said in the official statement. .

Piper Jaffray and City Securities Corp. underwrote the bonds, and Barnes & Thornburg LLP served as bond counsel as well as counsel to the borrower. The issuer's counsel was Zappia, Zappia & Stipp.

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