SAN FRANCISCO - The Treasury Department is open to suggestions for modifications to its recently issued notice on reissuance, which it plans to turn into proposed Internal Revenue Service regulations, a Treasury official said yesterday at the National Association of Bond Lawyer's Tax and Securities Law Institute here.

Notice 2008-27, which NABL members generally praised, clarifies that issuers can convert auction rate or other bonds to another interest mode or remove bond insurance without causing a reissuance of the bonds , so long as these changes are authorized in the bond documents. The issue has been a significant concern to muni market participants recently, as enacted or threatened downgrades to bond insurers have driven up interest rates on insured auction-rate bonds, leading issuers to consider a conversion to a more stable interest rate mode.

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