What is a 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. They also play various other roles to ensure value for the bondholders during bond and note offerings.
A municipal bond refers to debt security offered by a state, county or local government to finance capital expenditures such as infrastructure construction or school funding. Such bonds and notes are exempt from federal taxes, and often state and local taxes, depending on the location of the bondholder. The tax-exempt status makes them appealing investment vehicles.
BREAKING DOWN Bond Attorney
Bond attorneys are highly trained and very specialized. They are required to pass the state bar exam and need a Juris Doctor degree to practice. Typically, they work for government agencies or banks and are well-trained in tax and security law.
As part of their assessment of the bond, the attorney will often investigate it intended purpose and research the applicable laws accordingly. They will also help the government agency or bank ascertain that an issue it is correct, complete and properly structured. Given that such bonds pledge the full faith and credit of the issuer, which is payable from limited municipal revenue sources, strict attention to detail and an understanding of legal and financial requirements is critical to protecting the interests of bondholders.
Some of the bond attorney's responsibilities include:
- Helping state or local governments develop strategies for structuring their bonds offerings
- Attending or presiding over bond hearings
- Managing the documentation for the bond issuance
- Attesting to the Securities and Exchange Commission (SEC) or other agencies about the validity of the sale.
As the American College of Bond Counsel explains, bond lawyers are experts in all facets of municipal issues. These issues 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."
Lobbying Activities of Bond Attorneys
Bond attorney industry groups will sometimes lobby on behalf of certain issues affecting their lawyer members. For example, in August 2017, 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 national 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.