 | |
| Daily Rate As Of 07/28/2010 | |
| Corporate Overnight: | 0.32% |
| Government Overnight: | 0.22% |
| Corporate Overnight Plus: | 0.33% |
| 7 Day Yield As Of 07/28/2010 | |
| Corporate Overnight: | 0.32% |
| Government Overnight: | 0.22% |
| Corporate Overnight Plus: | 0.34% |
Tax Anticipation Notes Program
Running your organization requires steady, reliable cash flow, yet the taxpayer revenues you rely on are seldom in the bank when most bills arrive.
We understand the tension this kind of revenue-expense cycle mismatch can generate. That's why we offer clients a Tax Anticipation Notes (TAN) Program. TANs are short-term, tax-exempt notes that let you meet current demands in anticipation of the arrival of future tax revenues.
How TANs work
A TAN is like a line of credit from a bank in that you only draw out funds when you need them. What's different about a TAN, though, is that your interest rate is tax-exempt and so it is often lower than the prime lending rate, the national benchmark most banks use.
Another benefit of the TAN is that, if your proceeds are not withdrawn yet, you can expect them to earn interest at rates slightly higher than the interest you're obligated to pay on the TAN proceeds. In essence, you can earn interest income on the TAN that can then offset your costs for participation.
What about arbitrage requirements?
You will not be subject to any arbitrage rebate requirements if:
- The amount of your TANs, plus any other tax-exempt debt issued to you in the same calendar year is $5 million or more and
- Your entity has not misrepresented its expectations with respect to its projected cash flow deficit or the amount of general fund expenditures incurred during the previous fiscal year.
Do we qualify?
To participate in the TAN program, your general fund must meet certain sizing requirements for the upcoming fiscal year. We would be happy to talk with you to see if you qualify, walk you through the application process, or simply answer any questions you might have.
Please contact us at 800-558-8875 or financing@firstpublic.com.