A key provision of the American Recovery and Reinvestment Act of 2009 — a core stimulus initiative of the U.S. economy — is the issuance of Qualified School Construction Bonds to fund the building, rehabilitation, or repair of public school facilities in districts with a demonstrated need for additional resources. When the first district ever to issue this new type of financing sought a paying agent for the transaction, both the district administration and its investment bank looked to the agent with proven expertise in tackling new categories of bonds — namely, the Corporate Trust division of BNY Mellon.
The bond structure provides tax credits rather than paying interest and since the tax credits may be traded separately, BNY Mellon Corporate Trust will serve as registrar and transfer agent as well. In addition, special quarterly reporting procedures have been put in place for notifying the Depository Trust Corporation about expiring tax credits.
The school district and its investment underwriter were confident that BNY Mellon Corporate Trust could develop the right processes and procedures for their needs — and make it all work.
They were right.