Illinois Authority First to Settle With IRS Over FHLB-Backed Debt

Shields, Yvette
April 2003
Bond Buyer;4/11/2003, Vol. 344 Issue 31613, p1
Trade Publication
The Illinois Development Finance Authority approved the conversion of 5.3 million dollars of Coburn Steel Products Inc. (CSP) tax-exempt industrial revenue bonds to a taxable investment as part of its settlement agreement with the U.S. Internal Revenue Service (IRS). The IRS issued a preliminary determination that interest on the 2000 bond issue, sold on behalf of CSP, which was taxable because of the deal's use of a standby letter of credit from the Federal Home Loan Bank of Chicago. Under the settlement reached with the IRS, the issuer would have to pay a tax of 34,000 dollar. Under the settlement agreement investors may tender their bonds at a re-marketing scheduled for today, when the agreement is effective.


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