Bonds: available capital for economic development in Indian Country

The IRS has posted a useful audio seminar on its website that provides a good overview of Tribal Bonds, Tribal Economic Development Bonds (TEDBs) and Clean Renewable Energy Bonds (CREB). The seminar takes about 40 minutes and provides a useful overview of these categories.

If you don’t have time to take a listen, here is an overview. Please keep in mind that neither the seminar itself nor this blog post provides advice about specific transactions.

Dante Desiderio of the Native American Finance Officers Association (NAFOA) kicked off the conversation by putting the bond opportunities in context. Indian Country needs access to private capital to grow economically.

Travois is a member of NAFOA and recommends this organization to any tribe looking for access to information and resources. Check out the NAFOA website: www.nafoa.org.

If you have never participated in a bond financing before, the first 10 minutes or so would be useful in order to define key terms and obtain an overview of key concepts. After this introductory section, the program moved on to the specific topics.

Tax exempt tribal bonds:

  • These are bonds to be used for essential government function projects.

TEDBs:

  • This is probably the category readers of this blog will find most interesting.
  • There is a significant amount of TEDB volume cap left — almost $300 million.
  • TEBDs are there for non-gaming economic development projects that don’t constitute essential government functions.
  • There is no program deadline anymore, but the volume cap is limited.

CREBs:

  • CREBs are slightly different from the other two categories in that they offer tax credits to investors.
  • CREBs can be used to finance a wide range of renewable energy assets:
    • Wind, solar, biomass, some hydroelectricity, etc.

Travois’ goal is to connect Indian Country leaders to the information resources they need to make decisions. This seminar is a good place to start.

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