GOVERNMENT BONDS

Some bonds are issued by governments for their own use or the use of their citizens, such as to raise operating funds, build a recreation facility, or construct a municipal water system. Typically, these are called "governmental bonds."

REPRESENTATION FOR REVENUE BONDS

Most of the transactions handled at Sell & Melton LLP, though, are not specifically for the use of the governmental entity, but are in fact intended to raise funds for use by another entity through the governmental borrowing power of issuing bonds. These type of flow-through financings are referred to in the industry as "conduit financings."

These bonds are typically referred to as "revenue bonds," because the Borrower's revenues derived from the project are the only payment stream which is to be used to pay the bonds, and the bonds are not obligations of the issuing governmental entity and the government is not required to pay the principal and interest on the bonds if the project's revenues are insufficient to pay the debt service on the bonds.

The revenue bonds issued by governmental entities are generally of two types:

• Tax-exempt, or
• Taxable

Of course, because the federal government and IRS do not desire to allow states and their subdivisions plenary power to issue bonds the interest upon which people do not pay taxes, Congress and the IRS have placed significant restrictions on the type of projects and uses that governmental entities can issue bonds that qualified as "tax-exempt."

WHO CAN USE THIS TYPE OF FINANCING?

• Manufacturing companies, industrial companies, food processors and similar businesses;
• Churches, schools, colleges, and other educational institutions or non-profit groups;
• Hospitals, nursing homes, assisted living facilities;
• Providers of low-moderate income housing and elderly housing;
• Local and State Governments.

WHAT ROLE DOES SELL & MELTON PLAY IN PUBLIC/MUNICIPAL FINANCINGS?

Sell & Melton LLP has practiced in the area of Public/Municipal Finance since the firm's inception in 1980. Since that time, the Public/Municipal Section at Sell & Melton has participated in various roles as Issuer's counsel, Bond Counsel, and/or Borrower's counsel in over $1 billion in bond transactions. Sell & Melton handles bond financings in Middle and South Georgia. In addition, Sell & Melton has acted as Bond Counsel in Alabama, California, Florida, Illinois Indiana, Missouri, Mississippi, New York, North Carolina, Ohio, South Carolina, Tennessee, Texas and West Virginia.

R. Chix Miller is one of only six attorneys in Middle Georgia listed in The Bond Buyer's Municipal Marketplace Directory, known as the "Red Book." The Red Book identifies those attorneys and firms who specialize in public/municipal finance.

BOND COUNSEL/FINANCE

Contact R. Chix Miller at (478) 464-5342, [email protected], to get started.