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Yield Reduction Payments
Yield Reduction Payments
generally may be invested in other tax-exempt bonds without regard to the yield on the tax-exempt
investments.
Yield Reduction Payments
Yield reduction payments are similar to rebate requirement payments, but may
be allowed in additional situations where investing bond proceeds at an
unrestricted yield would not otherwise be permitted, thus freeing the issuer from
having to artificially restrict the yield on investments. Bond proceeds qualifying
for yield reduction payments include proceeds of an issue which initially
qualified for one of the temporary periods, but for which the temporary period
has expired, amounts held in reserve funds in excess of the limitations described
previously, and certain limited types of proceeds arising in refunding
transactions.