Taxable IDBs emerge as an attractive funding source

Article Abstract:

The Tax Reform Act of 1986 eliminated the nontaxable aspects of industrial development bonds (IDBs). Still, taxable IDBs remain attractive to large corporate investors, because they are accompanied by letters of credit from related banks, are issued in large blocks, and have above-average returns (lower than junk bonds, but better than Government National Mortgage Association issues or corporate bonds). IDB activity rates are expected to increase, as evidenced by the $100 million available to companies in any state from the nonprofit organization of American Development Finance Inc. State agencies, such as the Massachusetts Industrial Financial Authority, are also planning to make significant amounts of taxable IDBs available. Moreover, Enterprise Capital Fund (jointly formed by American Development Finance Inc. and the National Association of State Development Agencies) project IDB borrowing rates at 8.48 percent for 20-year loans (the traditional bank loan rate is expected to rise to 9.65 percent).

Economic aspects, Finance, Services, Investments, Corporate finance, Municipal bonds, Industrial development bonds, National Association of State Development Agencies, Massachusetts. Industrial Finance Agency, American Development Finance Inc.

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Momentum building for legislative relief from insurance crunch

Article Abstract:

A panel of federal officials, the Tort Policy Working Group, has been created by President Reagan to review product liability and property-casualty insurance availability and to study how the nation's tort system is affecting the availability of insurance coverage for municipalities, doctors, and pharmaceutical companies. The Reagan Administration and many members of Congress support the idea of a uniform federal tort reform law. Commerce Committee Chairman John Danforth has proposed a measure that sets uniform federal standards for liability claims. The Danforth bill requires that, in certain injury cases, the plaintiff prove both injury and negligence; in addition, judges would be allowed to weigh the magnitude of a design flaw against potential consumer abuse. The bill also provides an opportunity for plaintiffs to quickly recoverout-of-pocket expenses, at the price of foregoing 'pain and suffering' compensation and punitive damages.

Legislative bodies, Standards, United States, Laws, regulations and rules, Political activity, Tort liability, Products liability insurance, Product liability insurance, Tort liability of corporations, column, United States. Congress. Senate. Committee on Commerce, Science and Transportation, Danforth, John C.

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