Bond
Evidence of the borrowing by an issuer and a debt instrument for tax purposes.
bond-basics
Governmental (Purpose) Bonds
Bonds issued by an Issuer to finance all or a portion of its own project. Unlike Private Activity Bonds, Governmental Bonds or Governmental Purpose Bonds are not defined in the Code but are terms commonly used to refer to municipal Bonds that are not Private Activity Bonds. Governmental Bonds do not satisfy both the Private Business Tests and the Private Loan Financing Test.
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See Also
Private Business Use (PBU) and Tests
Any use of Bond proceeds in a trade or business carried on by a person other than a governmental unit. The private business tests are used in part to establish whether a bond is a private activity bond (PAB).
In Contrast With
Private Activity Bond (PAB)
The term used in the Code to describe any bond issued as part of a bond issue that meets both of the private business tests or meets the private loan financing test.
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Escrow Trustee (Agent)
The custodian of funds held in the escrow fund and responsible for holding and managing the escrow fund, including any investments in the escrow fund, up to and including the date when the refunded bonds mature or redeemed, whichever is earlier.