Investment of Bond Proceeds
Specialized expertise for tax-exempt financings
Why entrust the investment of bond proceeds to just anyone? Davidson stands ready to advise you in this specialized area, providing the experience and capabilities you need. Our professionals understand that the investment of bond proceeds is a key component of the debt issuance process. Income from the investment can be used to downsize the bond issue, increase the project fund, or offset costs. Structured products can be utilized to eliminate market risk and mitigate interest rate risk while optimizing safety, liquidity, and yield.
The investment of bond proceeds is highly specialized and heavily regulated from a tax and arbitrage perspective. As a result, structured investment products have been developed to meet the specific needs related to a tax-exempt debt financing. The primary goal of investing bond funds, after ensuring legality and safety, is to mitigate investment risk by having the necessary flexibility to utilize the proceeds, and then to maximize yield within these constraints. There are several investment strategies a tax-exempt entity can employ that meet these requirements. These products are flexible and simple to administer.
With respect to structured investments, Davidson has extensive experience with a wide variety of products, markets, and clients. We believe our knowledge of structured investments for the investment of bond proceeds is exceptional. Specifically, our product knowledge encompasses:
Davidson's structured investment professionals work as an independent advisor to help clients meet their investment objectives and represent their interests in the transaction. We develop all documents, structure the investments, and execute the competitive bidding process. Davidson has a multi-step process in place to ensure that the client's objectives of safety, liquidity, and yield are met. Funds typically invested include:
- Guaranteed Investment Contracts
- Repurchase Agreements
- Forward Delivery Agreements
- Debt Service Deposit Agreements
- Float Agreements
- Construction Funds
- Bond Funds
- Capitalized Interest Funds
- Debt Service Reserve Funds