CHICAGO — After a slow start, a federal program that allowed the nation’s Federal Home Loan Banks to guarantee non-housing related tax-exempt issues is picking up steam in the Midwest as local banks, borrowers, and underwriters see its value, local market participants say.

A recent notice from the Internal Revenue Service clarifying that the program applies to refunding bonds as well as new-money issuance, and the ongoing credit deterioration of some regional commercial banks, have helped stir interest in the program, according to market participants working on FHLB-backed deals.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.