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GTLaw: Restructuring Tax-Exempt Debt to Reduce or Delay Payments – What Are the Tax Implications?

May 6, 2020 |

As state and local governments (Issuers), and nonprofits and businesses that have borrowed through Issuers (Conduit Borrowers), face cash-flow difficulties, they may consider restructuring some of their tax-exempt obligations to reduce or defer payments on those obligations. The restructuring may be done in several ways, and there may be different tax consequences to the Issuer or Conduit Borrower depending on the option used. Of particular importance to the tax analysis are the rules that deem certain modifications of an obligation to be a reissuance of that obligation (the Reissuance Rules).


Rebecca L. Harrigal, Vanessa Albert Lowry and Andrew P. Rubin

Compliments of Greenberg Traurig, LLP – a member of the EACCNY.