Nonpurpose Obligation definition
Examples of Nonpurpose Obligation in a sentence
The Fair Market Value of a Nonpurpose Obligation shall be the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm’s-length transaction determined as of the date on which the contract to buy or sell the investment is entered into.
No transaction involving Gross Proceeds may be entered into if it will result in (i) a Yield on Nonpurpose Obligations less than the Yield that would have resulted from an arm's length transaction or (ii) a smaller profit or larger loss on the disposition of a Nonpurpose Obligation than would have resulted from an arm's length transaction.
In accordance with Section 1.103-13(c) of the Regulations, the Yield on the Bonds and the Yield on Nonpurpose Obligations is that yield which, when used in computing the present worth of all payments of principal and interest paid or to be paid on the Bonds or Nonpurpose Obligation during the computation period, produces an amount equal to the Purchase Price (as defined below).
A Nonpurpose Obligation is any security or obligation in which Gross Proceeds are invested, other than (i) a tax-exempt state or local governmental obligation described in Section 103(a) of the Code and (ii) the Loan Agreement.
A Nonpurpose Obligation must be valued at fair market value on and as of the date such obligation is acquired with Gross Proceeds or otherwise becomes Gross Proceeds (e.g., by a pledge of such security or obligation to secure the Bonds).
For purposes of computing the Yield on Nonpurpose Obligations, the Purchase Price is the fair market value of the Nonpurpose Obligation determined as of the date on which such obligation becomes a Nonpurpose Obligation.