41487983_sFor issuers of tax exempt bonds, sections 103 and 148 of the Internal Revenue Code stipulate that any earnings over the declared yield of a tax-exempt bond issue must be rebated to the Federal Government. These excess earnings are defined as arbitrage.

Reedy Financial Group performs the calculations needed to determine the amount, if any, that must be rebated.  These calculations are best performed by outside professional service organization such as Reedy Financial Group. 

This calculation must be performed at least every five years over the life of the issue, even if your issue does not earn arbitrage.  It is imperative that you stay compliant with these regulations, or risk steep penalties.  If you are an issuer of tax-exempt bonds, or an obligated party in a tax-exempt issue, let Reedy Financial Group’s expert staff assist you with the complexities of arbitrage rebate compliance.

Our specialized training and experience enables us to handle a wide variety of complex arbitrage issues affecting a rebate calculation such as the allocation of commingled funds, transferred proceeds computations, yield restriction issues, late filing issues, and multipurpose issues. Each of our rebate reports includes our opinion, independent calculation of bond yield, calculation of the rebate amount which is the difference between the actual and allowable earnings on the bond proceeds, and a summary of the information and computational assumptions affecting the calculations.

Please reach out to us today for assistance with Arbitrage Rebate reporting or assistance.