WASHINGTON — The Internal Revenue Service is auditing $130.96 million of consolidated revenue bonds issued in September 2002 by the Board of Regents of the University of Houston System to finance the acquisition, construction, and renovation of facilities.

The Board of Regents disclosed the audit in an event notice filed with the Municipal Securities Rulemaking Board's EMMA system.

The IRS notified the board of the audit in a Dec. 6 letter that stated it routinely examines municipal debt issuances to determine compliance with federal tax requirements, according to the notice.

The Board of Regents' event notice contains two paragraphs under a "Miscellaneous" heading that states, in part: "The issuer disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreements or from any statement made pursuant to its agreements, although legal and beneficial holders of [the] bonds may seek a writ of mandamus to compel the issuer to comply with its agreements."

Officials at the University of Houston System could not reached for comment.

The bonds were insured by Financial Security Assurance Inc., now Assured Guaranty Municipal Corp.

The bond transaction was approved by the Texas attorney general.

First Southwest Co. in Houston was financial adviser on the deal. Co-bond counsel were Andrews & Kurth LLP, now Andrews Kurth LLP, and Epstein Becker Green Wickliff & Hall PC, both of which are located in Houston.

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