WASHINGTON — The groundbreaking nature of direct-pay Build America Bonds has led the National Association of Bond Lawyers to issue new guidance recommending bond counsel give opinions to issuers that the bonds qualify as BABs rather than give tax opinions to investors.

“The novel structure of direct-payment BABs requires issuers, purchasers, or underwriters and bond counsel to rethink how and if tax opinions for direct payments BABs will be of interest only to the issuer, not investors and underwriters,” NABL wrote in a 14-page report that was prepared by an ad hoc committee and dated June 30 but not released until yesterday.

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