State law provides several methods to finance the costs of capital improvements for industrial development. Typically known as IDBs or IRBs, industrial revenue bonds usually are issued by a state or local governmental authority to provide tax-exempt financing for manufacturing facilities, port facilities, recycling facilities, and other purposes for which tax-exempt private activity bonds may be issued under the federal income tax code. Many industrial development bonds are subject to volume cap limitations imposed on private activity bonds by the Internal Revenue Code.
Industrial revenue bonds provide long-term, often fixed rate, and, if qualified, tax exempt financing for privately owned or operated facilities. These bonds can also be used to avoid personal guarantees and other collateral requirements of conventional lenders. Our bond attorneys have also handled transactions structured on a non-recourse basis. Deal structures for which we served as bond counsel or underwriter’s counsel include both public offerings of bonds as well as private placements, IDBs backed by credit enhancement (such as bank letters of credit), issues sold based only on the project’s or industry’s ratings, and non-rated bonds.
The bond lawyers at Howell Linkous & Nettles have served as bond counsel, underwriter’s counsel, lender’s counsel, and borrower’s counsel for many industrial revenue bond financings across the South. Our extensive experience in this type of financing includes nearly all categories of private activity bonds that can be issued under the Internal Revenue Code (such as for small issue manufacturing facilities, solid waste disposal facilities, recycling facilities, port facilities, airport facilities, and multifamily housing), as well as taxable bonds for facilities which do not meet the eligibility criteria for tax exempt finance.