The Internal Revenue Service will publish in the Federal Register on Monday, July 18, final regulations on the arbitrage investment restrictions on tax-exempt bonds, finalizing proposals from 2007 and 2013. The final regulations do not include provisions on the determination of issue price. These final regulations amend existing regulations to address certain market developments, simplify certain provisions, address certain technical issues, and make the existing regulations more administrable. Notable topics covered include a new compliance-focused safe harbor for longer-term working capital expenditure financings, integration and significant modifications of qualified hedging transactions (e.g., interest rate swaps), valuation of investments at present value or fair market value in specified circumstances, and the treatment of grants with bond proceeds.
The final regulations are available here.