On June 12th, 2009, the U.S. Treasury and the IRS released Notice 2009-50, which contains interim guidance on taxable recovery zone economic development bonds (RZEDBs) ($10 billion national limit) and tax-exempt recovery zone facility bonds (RZFBs) ($15 billion national limit). RZEDBs are supercharged Build America Bonds (because the direct pay subsidy from the Treasury to the issuer is 45% of interest payable) issued to finance certain eligible costs, and RZFBs are exempt facility bonds which may be issued to finance certain eligible costs of active private businesses (excluding residential rental properties and certain banned facilities). Projects financed with RZEDBs or RZFBs must generally be located within a designated Zone. We expect this program to be highly successful, due to the deep subsidy for RZEDBs and the availability of RZFBs to private business for economic development, once Zones are designated and projects are selected for financing.

Please see full advisory for more information.