Industrial Revenue Bond (IRB) for acquisition?

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May 30, 2018

by a searcher from The University of Chicago - Booth School of Business in Sacramento, CA, USA

Does anyone have experience with using Industrial Revenue Bond (IRB) as a funding source for acquisition? Prima facie it seems like an attractive funding option with preferable tax treatment. Can a deal be structured using only IRB or Senior Debt + IRB?
Does anyone know what the implications might be?

Thanks in advance. Vijay

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Reply by a searcher
from The University of Chicago in Sacramento, CA, USA
Thank you Clarence. I appreciate the help. I am looking at submitting an IOI for a manufacturing business and was looking at all relevant funding options. One aspect of the IRB which stood out was: "Funds can be used to acquire an existing manufacturing plant as long as 15% or more is used to rehab the structure.". Here are some additional details : https://www.firstambank.com/businesssolutions/businessloans/industrialrevenuebonds/
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Reply by a searcher
from University of Toledo in Shaker Heights, OH, USA
I'm aware of the provision, however the devil may be in the details. There seems to be Blue Sky clauses which effect the overall utilization of the bonds. Not to mention, from my reading regarding the State of Ohio, a deal sponsor/issuer would have to find or create a market for the newly created bonds.
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