On February 19, 2008, the Treasury and IRS published Notice 2008-27 (the “Notice”) in response to requests for relief from “reissuance” treatment of restructurings of tax exempt

obligations by issuers seeking to replace, wrap or remove damaged credit facilities and convert tender option bonds (“VRDBs”) or auction rate securities (“ARS”) to more marketable interest modes.

The effect of avoiding a reissuance is that restructurings can be accomplished without subjecting the restructured bonds to certain tax requirements associated with refundings, such as accelerating rebate payments to the federal government, truncating bond yield and/or loan yield calculation periods with potential adverse effects, and application of new tax requirements to the “reissued” bonds. Although reissuance is a highly technical area, its avoidance can favorably impact the timing and economics of a restructuring.

Generally, the Notice clears the way for most mode changes and security changes without the risk of triggering adverse tax consequences by causing the bonds to be deemed reissued,

and therefore refunded, under Sections 103 and 141 through 150 of the Internal Revenue Code as a result of such modifications. In particular, the Notice clarifies that conversions from ARS to other interest modes, and most amendments in connection with a conversion from a short-term interest mode to a long-term interest mode, will not be treated as a reissuance for federal tax purposes. Although the Notice does not resolve non-tax issues associated with attempts to cancel or suspend bond insurance from mono-line bond insurers experiencing

ratings difficulties and/or introducing bank letters of credit as additional security on bonds backed by such bond insurers, it does facilitate many such restructurings from a tax perspective.

The Notice may be relied upon by issuers immediately and can be applied retroactively to actions taken on or after November 1, 2007.