What is ‘Bond Attorney’
A bond attorney is a lawyer who represents municipal bondholders‘ interests during a bond offering, and who prepares a legal opinion attesting that the issue is legal, valid and binding. He or she also plays various other roles to ensure value for the bondholders when bonds are offered.
A municipal bond refers to a debt security offered by a state, county or local government in order to finance capital expenditures such as infrastructure construction or school funding. Such bonds are exempt from federal taxes (and oftentimes state and local taxes), which makes them appealing investment vehicles.
BREAKING DOWN ‘Bond Attorney’
Bond attorneys are highly trained and very specialized. As the American College of Bond Counsel explains, such lawyers are experts in all facets of municipal bonds – which might include “bonds, notes, revenue certificates, warrants and other forms of debt issued by or on behalf of states, territories and possessions of the United States, their political subdivisions, Native American tribes and the District of Columbia.”
Given that such bonds pledge the full faith and credit of the issuer, and a wide variety of bonds, notes and other obligations payable from limited revenue sources, strict attention to detail and an understanding of legal and financial requirements is key to protect the interests of bondholders.
According to the law firm Mintz Levin, which represents bondholders, trustees and others, including some of the biggest institutional investors in tax-exempt securities, “each distressed debt workout has its own complex mix of credit, legal, strategic and tax implications.” It’s critical that bond attorneys understand the needs and requirements of stakeholders, and have a deep familiarity with tax-exempt market regulations in order to properly represent their interests.
The job of the bond attorney in practice
A bond attorney is required to pass the state bar exam, and also needs to have a Juris Doctor degree. Typically, they work for government agencies or banks and are well-trained in tax and security law.
The work they do may include helping state or local governments develop strategies for structuring their bonds offerings, attending or presiding over bond hearings and managing the documentation for the bond issuance, to attest to the Securities and Exchange Commission or other agencies about the validity of the sale.
As part of their assessment of the bond, the attorney will often investigate it intended purpose and research whatever laws might be applicable accordingly. He or she will also help the government agency or bank – attorneys can work for one or the other – ascertain that an issue its correct, complete and properly structured.
Bond attorney industry groups will sometimes lobby on behalf of certain issues affecting their lawyer members. For example, this past year the National Association of Bond Lawyers recommended the creation of new categories of tax-exempt and taxable bonds to help with the financing of infrastructure, utilities and schools.
As the Trump administration and the U.S. Congress weighed spending as much as $1 billion on nationwide infrastructure projects, NABL saw it as an opportunity to put forth a series of suggestions for the ways tax-exempt bonds could be used to pay for public works.