Professional Services Agreement - Fifth Third Securities - Zoo Capital Project Underwriter Services

Home Browse Search

FIFTH HIRD" SECUtITIFFS This description is only a brief summary of issues relating to defaults and is not intended as legal advice. You should consult with your bond counsel for further information regarding defaults and remedies. Redeinl2tion Risk Your ability to redeem the bonds prior to maturity may be limited, depending on the terms of any optional redemption provisions. In the event that interest rates decline, you may be unable to take advantage of the lower interest rates to reduce debt service,. Refmanchlg_E�isk If your financing plan contemplates refinancing some or all of the bonds at maturity (for example, if you have term maturities or if you choose a shorter final maturity than might otherwise be permitted under the applicable federal tax rules), market conditions or changes in law may limit or prevent you from refinancing those bonds when required. Further, limitations in the federal tax rules oil advance refunding of bonds (an advance refunding of bonds occurs when tax-exempt bonds are refunded more than 90 days prior to the date on which those bonds may be retired) may restrict your ability to refund the bonds to take advantage of lower interest rates, Reinvestinent Risk You may have proceeds of the bonds to invest prior to the time that you are able to spend those proceeds for the authorized purpose, Depending on market conditions, yo i may not be able to invest those proceeds at or near the rate of interest that you are paying on the bonds, which is referred to as "negative arbitrage". "Tay Coiyphance Risk The issuance of tax-exempt bonds is subject to a number of requirements under the United States Internal Revenue Code, as enforced by the Internal Revenue Service (IRS). You must take certain steps and make certain representations prior to the issuance of tax-exempt bonds. You also must covenant to take certain additional actions after issuance of the tax-exempt bonds. A breach of your representations or your failure to comply with certain tax -related covenants may cause the interest on the bonds to become taxable retroactively to the date of issuance of the bonds, which may result in an increase in the interest rate that you pay on the bonds or the mandatory redemption of the bonds, The IRS also may audit you or your bonds, in some cases on a random basis and in other cases targeted to specific types of bond issues or tax concerns. If the bonds are declared taxable, or if you are subject to audit, the market price of your bonds, may be adversely affected. Further, your ability to issue other tax-exempt bonds also may be limited, This description of tax compliance risks is not intended as, legal advice and you should consult with your bond counsel regarding tax implications of issuing the bonds. i"itti, 'ridrd Securities is the bade iianqe LMEd by Fifth Third Seat hies, Inc., member FU,N . -RA/ .S..IM, a Miollyowned subsidjaiy of Fifth Mird Bank, a registered biokerdeaBer, and a iegistei ed ii ivestment advisor iegistered with the U.S. SeCt_ffitieS wd Exchaii�(,, Gon,iniissioii Rpfsistratioo does riot iii1ply a ceitam level of skill or tiati-fing, Spciii-iHPs Hiid invesW)PMs offered thIOUgh Hith Third Secui ities, Inc. arid aIlsurallce products: Ate Not FDtC IMUred Offer No Bai* GAMRIMCP, May LOSOVrro1L]e Are Not Irsured By Any Federal Goveri)diiei)t Agency Are Not A Do, posit InSLIN'.WCO J)10dUCtS Mad(' available thiough Fifth Third 1t)sorance Agoticy, Inc.