Final Treasury Regulations Defining Issue Price

For a variety of reasons related to arbitrage, it often is important to identify the "issue price" of tax-exempt bonds with precision and certainty.¹ Existing Treasury Regulations generally allow the "issue price" of publicly offered bonds to be determined based on the first price at which at least 10% of all substantially identical publicly offered bonds in fact are sold to purchasers other than underwriters and wholesalers.² By a special alternative rule, existing Treasury Regulations allow the "issue price" to be determined based on the issuer's reasonable expectations as of the sale date about the price at which substantially identical publicly offered bonds will be sold to the public.