03-16-2016, 03:59 PM
FYI http://www.trutags.com/ This looks very interesting and worthwhile.
Special purpose revenue bonds are not a liability for the State. The interest and principle are solely the responsibility of the entity named in the bond. The advantage to the company is that the interest payments are usually tax free to the bond holder,( both federal and State for Hawaii residents). This type of bond allows the borrower to pay a lower rate of interest than they would pay with taxable corporate bonds. However the rate is not as low as what the State pays on general obligation bonds where the State itself is responsible for interest and principle.
There are numerous cases where the borrower has gone broke and the bond holders get stuck. (Think nuclear reactors) The State is not liable for their loss.
The Federal Government misses out on some income tax, but Hawaii supports a reasonable venture with attractive possibilities. Whats not to support?
Special purpose revenue bonds are not a liability for the State. The interest and principle are solely the responsibility of the entity named in the bond. The advantage to the company is that the interest payments are usually tax free to the bond holder,( both federal and State for Hawaii residents). This type of bond allows the borrower to pay a lower rate of interest than they would pay with taxable corporate bonds. However the rate is not as low as what the State pays on general obligation bonds where the State itself is responsible for interest and principle.
There are numerous cases where the borrower has gone broke and the bond holders get stuck. (Think nuclear reactors) The State is not liable for their loss.
The Federal Government misses out on some income tax, but Hawaii supports a reasonable venture with attractive possibilities. Whats not to support?