WEDFA: Programs: Taxable Tail

"Taxable Tail"
Consolidated Taxable/Tax-Exempt Nonrecourse Revenue Bond Financing Program

Tax Status
Interest for "Taxable Tail" bonds is subject to federal income tax.

Eligible Projects
"Taxable Tail" bonds will normally used in conjunction with tax-exempt "exempt facility" or industrial revenue bond financings to allow the total project - both the parts eligible for tax-exempt financing and those not so eligible - to be financed in one bond issuance with the cost advantages of the melded rate and issuance process efficiencies.

Borrowing company must be creditworthy and project must be located in Washington.

Eligible Costs
(1) costs eligible for tax-exempt financing but for which insufficient bond cap is available, and
(2) costs not eligible for tax-exempt financing such as working capital, capitalized R&D costs and capitalized interest.

Outstanding obligations incurred as a part of the project can also be refunded.

Project Size
No set dollar amount. WEDFA is restricted by statute from issuing more than $750 million of bonds in total.

Financing Source
National taxable credit markets. No governmental funds or guarantees are involved. The bonds must be either publicly sold or privately placed with qualified investors.

Security and Bonds
No governmental financial support is provided. Payment of interest for the principal is the responsibility of the borrowing company. If the bonds are publicly sold, the financing must be secured by a letter of credit from a commercial bank rated investment grade by one of the major rating agencies.

Issuing Authority
Washington Economic Development Finance Authority (WEDFA), a public corporation of the state authorized by the legislature to issue nonrecourse tax-exempt/taxable economic development revenue bonds.

Contact:
Rodney Wendt
Washington Economic Development Finance Authority (WEDFA)
1000 Second Ave., Suite 2700, Seattle, WA 98104-1046
tel: (206) 587-5634, fax: (206) 389-2819.
Email: wedfa@wshfc.org