Header graphic for print
Public Finance Matters Updates on recent public finance and municipal bond developments

Tag Archives: redemption

Federal Appellate Court Rules That Post-Acceleration Payment in Bankruptcy Constitutes Optional Redemption

Posted in Bankruptcy

By LEN WEISER-VARON The linked Mintz Levin client advisory discusses a recent Third Circuit Court of Appeals ruling that held a “make-whole” optional redemption premium to be due upon a refinancing of corporate debt following its automatic acceleration upon bankruptcy. As noted in the linked advisory, the Second Circuit Court of Appeals also is considering this issue;… Continue Reading

Court Rules on Applicability of Make-Whole Premiums Upon Debt Acceleration

Posted in Bankruptcy, Financing Structures

BY LEN WEISER-VARON The linked Mintz Levin client advisory, which discusses a recent bankruptcy court ruling regarding the applicability of a make-whole premium upon a refinancing of corporate debt following such debt’s automatic acceleration upon bankruptcy under the terms of the governing documents, may also be of interest to holders of municipal bonds with call… Continue Reading

Second Circuit Rules Against Make-Whole Premium for Refinancing of Accelerated Debt

Posted in Bankruptcy

By LEN WEISER-VARON The U.S. Court of Appeals for the Second Circuit has upheld a bankruptcy court’s decision enforcing indenture language providing for the automatic acceleration, without make-whole premium, of secured American Airline, Inc. notes upon American Airline Inc.’s bankruptcy filing.  The Second Circuit’s September 12 opinion generally follows that of the lower court, discussed in… Continue Reading

Valuing Advance Refundings

Posted in Financing Structures

Advance refundings may be an appropriate target for the semi-jocund question, “sure it works in practice… but does it work in theory?”  A recent study of approximately 150,000 transactions which concluded that advance refundings “destroy value” is reviewed and critiqued in the following commentary featured in The Bond Buyer.  http://www.bondbuyer.com/issues/122_155/commentary-valuing-advance-refundings-1054558-1.html

“28% Cap” Unlikely to Trigger Wave of Municipal Bond Tax Calls

Posted in Tax/arbitrage

By LEN WEISER-VARON Market commenters have suggested that billions of dollars in municipal bonds may be subject to par redemptions if the much-discussed “28% cap” on the value of certain federal income tax deductions or exclusions is enacted and if the capped items include municipal bond interest.  While such commenters flag an issue worthy of… Continue Reading