VPSA Bonds definition
Examples of VPSA Bonds in a sentence
The principal installments of your local school bond will bear interest at rates 5 basis points (0.05%) above the actual rates on the VPSA Bonds with corresponding principal payment dates.
You will, however, be required to pay to VPSA at your actual closing an amount equal to the positive difference, if any, between (A) the amount of interest that would have accrued on your local school bond had VPSA been able to purchase your local school bond on the Closing Date and (B) the lesser of (i) the amount of interest income VPSA was able to earn, during such period, from the investment of its bond proceeds pending their use to purchase your bond and (ii) the arbitrage yield on the VPSA Bonds.
In addition to the computation of the Localities' Locality Rebate Requirement, VPSA shall calculate its Rebate Requirement with respect to Nonpurpose Investments that were acquired with the Gross Proceeds of the VPSA Bonds in accordance with the procedures set forth in the Related VPSA Tax Agreement executed by VPSA in connection with the issuance of the VPSA Bonds.
The difference in the interest rates between the VPSA Bonds and the Local School Bonds shall be collected and retained by VPSA as partial payment of the administrative costs incurred by VPSA in connection with issuing, carrying, and repaying the VPSA Bonds, and the underwriting discount, if any, and the cost of purchasing, carrying, and selling or redeeming the Local School Bonds.
In order to comply with the covenants by VPSA and each of the Localities regarding compliance with the requirements of the Code and the exclusion from federal income taxation of the interest paid and to be paid on the VPSA Bonds, the procedures described in this Letter Agreement may be modified as necessary, based on the advice of counsel, to comply with rulings, regulations, legislation or judicial decisions as may be applicable to such bonds.
VPSA has determined that in order to fulfill its representations respecting the maintenance of the excludability of the interest on the VPSA Bonds from gross income for federal income taxation under Section 103 of the Code, VPSA must establish a mechanism to provide accountability for the custody, investment and disbursement of the proceeds of the Local School Bonds, which for purposes of the Code continue to be proceeds of the VPSA Bonds.
To that end, each Locality covenants and agrees that it will take any and all action and refrain from taking any and all action, as recommended by its bond counsel, to maintain the excludability from gross income for federal income tax purposes of interest on the VPSA Bonds to the same extent such interest was so excludable on the Closing Date.
Each Locality acknowledges that the payment of its Yield Reduction Payment is necessary to maintain the exclusion from gross income for federal income tax purposes of interest on the VPSA Bonds.
Investment Reports and records of the determinations made hereunder shall be retained by the Investment Manager and by VPSA, respectively, until six (6) years after the retirement of the VPSA Bonds.
Each Locality hereby covenants and represents that neither the Locality nor any related party, as defined in Section 1.150-1(b) of the Treasury Regulations, to such Locality, pursuant to any arrangement, formal or informal, will purchase the VPSA Bonds in an amount related to the amount of the Local School Bond to be acquired from such Locality by VPSA.