legal opinion
- needed before a bond can be issued
bond counsel
- makes sure bond interest is exempt from taxes
- makes sure other legal matters won't affect value of bond
- makes sure bond is a municipal bond according to area laws
- may get favorable legislation passed
- attests to tax exempt status of bond
- IRS determines tax exempt status of bond according to passed laws
qualified legal opinion
- some aspect may make bond interest taxable
- some legal matter may affect bond value
nonqualified legal opinion
- no aspect would make bond taxable
- no aspect would prevent bond from keeping tax-exempt status
official statement
- municipal bond equivalent to corporate bond prospectus
- underwriter prepares this before bond is sold to public
- given to purchasers and dealers when they request it
- preliminary official statement, before official statement is given, no pricing info
official statement
- purpose/use of bonds
- how funds will be used?
- call provisions
- other info investors want
Which of the following statements is a description of a qualified legal opinion?
- The legal opinion on the bond's tax exempt status is less than 100% certain
- qualified, some uncertainty on tax-exempt status
- OR some uncertainty on legal matter affecting bond
- nonqualified-no uncertainties about bond's tax exempt status
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