What is a bond counsel qualified legal opinion?
Asked by: Norval Heidenreich | Last update: October 29, 2023Score: 4.9/5 (14 votes)
Bond Counsel's Opinion typically addresses the following matters: (1) that the Bonds have been duly authorized, executed and delivered by and are valid and binding obligations of the Issuer; (2) the source of payment or Security for the Bonds; and (3) federal and state income tax issues, including whether and to what ...
What is a bond counsel opinion?
Bond Counsel is an important member of the debt issuance team who is retained by the Issuer but represents the interests of the bondholders. Bond Counsel provides a legal opinion that: Issuer is authorized to issue proposed municipal securities and has met all legal and procedural requirements necessary for issuance.
What does qualified legal opinion mean?
Definition of Qualified Legal Opinion
Qualified Legal Opinion is a legal opinion containing conditions or reservations relating to the issue. A legal opinion is issued by a bond counsel for a municipal issuer.
What is a qualified legal opinion on a revenue bond?
For a revenue bond issue, a reason for a qualified opinion is that the bond counsel has found other legal claims (liens) on the revenues that have been pledged to the bondholders.
What is an unqualified legal opinion on a municipal bond state?
An unqualified legal opinion states that the lawyer has no reservations, that the issuance is a legally binding obligation of the municipality, and that interest payments received from investors are exempt from federal tax.
SIE Exam Prep: Part 8 (Types of Debt)
What does the legal opinion about a municipal bond issue attest to?
The unqualified legal opinion on a municipal bond states that: Bond counsel attests that, to the best of its knowledge, the issuer has the legal right to issue the securities in question.
What does the municipal bond counsel opine on?
The bond counsel examines new municipal issues for legal or tax problems and renders an opinion on the validity, legality and tax exempt status of the issue. Bond counsels do not render market or economic opinions, which is the same as rendering an opinion on the marketability of an issue.
What is the difference between an unqualified and qualified legal opinion?
Unqualified opinion: The bond counsel has no reservations about the issuer's authority to borrow, the nature of the bond, and the tax exemption. This is usually called an “approving” opinion of counsel. Qualified opinion: The bond counsel expresses concerns about some or many aspects of the bond.
What does it mean to be bond qualified?
Qualified bond means a revenue bond that is a "qualified bond" within the meaning of Section 141(e) of the Code, the interest or distributions in respect of which are excluded from gross income for federal income tax purposes, and which is secured by, among other collateral, a mortgage on a multifamily housing property ...
How do municipal revenue bonds work?
Revenue bonds are not backed by government's taxing power but by revenues from a specific project or source, such as highway tolls or lease fees. Some revenue bonds are “non-recourse”, meaning that if the revenue stream dries up, the bondholders do not have a claim on the underlying revenue source.
What is a legal opinion of counsel?
A legal opinion is a formal letter from your company's corporate counsel to the investors containing counsel's conclusions about various legal matters relevant to the company and the transaction, based on counsel's review of a defined body of documents and information.
What is the value of a legal opinion?
The purpose of providing the legal opinion is two-fold: to inform the addressee of the legal effect of a transaction or matter; and. to identify legal risks that the addressee should consider and further evaluate.
What is the difference between a legal opinion and a legal decision?
A decision is a loose term for the set of opinions that accompany an order, combined with that order. There may be more than one case associated with a particular decision. An opinion is a general term describing the written views of a judge or judges with respect to a particular order.
What does it mean to have a qualified legal opinion issued for a municipal bond underwriting?
The word "qualified" describes the legal opinion, not the attorney (or bond counsel) who issued it. A qualified legal opinion is one in which the bond counsel expresses reservations about conditions that may affect the bond's status. An unqualified legal opinion is rendered without restriction or condition.
What is the difference between counsel and council for lawyer?
Counsel and council are pronounced the same, but they have different (though related) meanings. Counsel is a verb meaning “advise” and a noun meaning “advice” or “instruction.” It can also be used as a noun to refer to a lawyer. Council is a noun referring to an advisory or legislative body of people.
What is the primary responsibility of the bond counsel quizlet?
The bond counsel examines new municipal issues for legal or tax problems and renders an opinion on the validity, legality and tax exempt status of the issue. Bond counsels do not render market or economic opinions, which is the same as rendering an opinion on the marketability of an issue.
How many years do you have to hold an I Bond?
You can cash in (redeem) your I bond after 12 months. However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest.
Do you need good credit for a bond?
You may have thought that your low credit score would prevent you from obtaining the bonds you need, but that's not necessarily the case. Some surety companies are willing to issue bad credit bonds despite the fact that your business has a low credit score.
What's the difference between a bond and an Ibond?
EE Bond and I Bond Differences
The interest rate on EE bonds is fixed for at least the first 20 years, while I bonds offer rates that are adjusted twice a year to protect from inflation. EE bonds offer a guaranteed return that doubles your investment if held for 20 years. There is no guaranteed return with I bonds.
Why is it called a qualified opinion?
A qualified opinion indicates that there was either a scope limitation, an issue discovered in the audit of the financials that were not pervasive, or an inadequate footnote disclosure. A qualified opinion is an auditor's opinion that the financials are fairly presented, with the exception of a specified area.
What is a qualified opinion example?
Example 2: Qualified opinion due to a scope limitation
The auditor wants to send out confirmation letters to customers for the accounts receivable balance as audit evidence. However, ABC Company does not want the auditor to do so. In such a scenario, a scope limitation reservation is made.
Is a qualified opinion a clean opinion?
A clean opinion is an unqualified auditor's report regarding an entity's financial statements. Such a report indicates the auditor's belief that the entity's financial statements fairly present its financial results, financial position, and cash flows.
Do all municipal bonds have a legal opinion?
Most municipal bonds have the legal opinion of a bond law firm, or bond attorney, printed directly on them. Bond law firms are engaged to provide an objective legal opinion with respect to the validity of bonds and other subjects, particularly the tax treatment of interest on municipal bonds.
What will the bond counsel examine in order to render an opinion on a new municipal bond issue?
Rationale: The bond counsel renders an opinion as to the legality, validity, and tax exempt status of a new municipal issue. To do this, he examines municipal statutes, state laws, judicial edicts, and tax regulations.
Who is responsible for hiring bond counsel in a new municipal offering?
In a new municipal offering, who is responsible for hiring bond counsel? The issuer hires a bond attorney to render an opinion on the prospective municipal offering.