The Internal Revenue Service yesterday released guidance clarifying that Jan. 1 is the deadline for issuers to receive tax benefits on “draw-down bonds” that are eligible for temporary bond programs, including Build America Bonds.

Issuers sometimes enter into a private-placement transaction with a bank wherein issuers agree to sell bonds up to a certain amount and “draw down” the amount in smaller transactions over time. The issuer pays only the interest on the amounts that it has drawn.

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