Tender Option Bonds definition

Tender Option Bonds or “TOB” means floating rate bonds, secured by municipal or other tax-exempt bonds, that grant the holder the option to require the issuer of the bond to repurchase the bond (typically, but not limited to, at par) prior to maturity.
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Examples of Tender Option Bonds in a sentence

  • In addition, the cost of leverage to the Fund resulting from the creation of Tender Option Bonds is expected to vary over time and, depending on the market conditions, may be higher or lower than the cost of leverage associated with the Preferred Stock.

  • The Funds do not have any alternative financing arrangements or alternative financing plans in the event the Tender Option Bonds are not created.

  • In creating Tender Option Bonds, each Fund would transfer an eligible bond from its portfolio to a special purpose trust that would issue two classes of securities: floating rate certificates, which would pay an interest rate that generally would be reset weekly, and residual interest bonds, which would pay an interest rate based on the difference between the interest rate earned on the underlying bonds and the interest rate paid on the floating rate certificates, after expenses.

  • The Board of each Fund believes that the Fund will have the monies to purchase the tendered Preferred Stock pursuant to the Fund's Offer through the creation of Tender Option Bonds.

  • On November 28, 2017, each Fund's Board approved a proposal presented by the Adviser to refinance the Fund's current leverage by (i) conducting the Offer for the Preferred Stock at a price reflecting a discount to liquidation preference and (ii) replacing the leverage provided by such tendered Preferred Stock with Tender Option Bonds.

  • Each Fund will purchase all of its Preferred Stock validly tendered and not withdrawn prior to the Expiration Date, subject to the satisfaction or waiver of all conditions described in the section captioned "The Offers – Certain Conditions to the Offers" of this Offer to Purchase, including the condition that after the Expiration Date the Fund create Tender Option Bonds on terms satisfactory to the Fund as described herein.

  • The creation of Tender Option Bonds would enable a Fund to replace any tendered Preferred Stock and maintain its current leverage levels.