DENVER – Issuers are heading into uncharted waters with a new issue price rule taking effect next month, and many members of the Government Finance Officers Association’s Committee on Governmental Debt Management are anxious, even if the rule likely won’t impact them much.

The discussion during the committee’s meeting Saturday focused on the potential for issuers who sell bonds competitively to get into trouble under the new issue price rules, which were finalized by the Internal Revenue Service and the Treasury late last year and which are effective June 7. Issue price regulations are critical for issuers of muni bonds, because issue price determines the yield on bonds and whether an issuer is complying with arbitrage rebate or yield restriction requirements, among other things. Under rules that had been in place for years, the issue price of each publicly offered maturity of bonds was generally the first price at which 10% of the bonds was reasonably expected to be sold to the public.

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