Solid waste companies are using tax-exempt financing as an alternative to traditional financing options to stretch their dollars further.
Since 1968, private companies have been able to finance qualifying projects by issuing tax-exempt private activity bonds (PABs) as an alternative to traditional corporate debt. The benefits of PABs include potentially significant interest rate saving in light of the tax-exempt status of the bonds, potentially longer term debt than otherwise available, access to an additional pool of investor capital and flexible financing structures.
However, to receive PAB benefits, the issuer needs to comply with various federal and state regulatory requirements that may result in smaller bond issuances and a more involved bond issuance process (with pre- and postissuance compliance requirements) than traditional corporate debt. Nevertheless, the use of PABs is widespread across multiple industries by publicly traded and privately held companies.
Read the full article as originally published in the March/April 2017 issue of “Waste Today” here.