Note:

For bonds that are noncallable, payment through maturity of the applicable tax-exposure, credit maintenance amount or other basis for the resolution amount eliminates the requirement for irrevocable call notice and defeasance of the bonds.

If an issuer redeems 100% of the outstanding principal amount of the bonds during an exam, consider closing the exam without further action if your group manager concurs and obtains written approval from the PM.

Factors for consideration in whether to close the examination pursuant to this subsection:

What are the reasons for noncompliance?

Is the transaction abusive?

Were interested parties involved in aspects of the transaction that resulted in noncompliance?

Were reasonable steps taken by the issuer/borrower to ensure compliance with the law?

Did the issuer/borrower take steps to self-correct prior to the start of the exam?

If your manager concurs and the Program Manager approves closing the case pursuant to this subsection, and you have a basis to conclude that the bonds do not comply with the law:

Issue Letter 5859, Full Bond Redemption - Compliance Issue Identified.

Report the Principal amount of bonds redeemed and the present value of the tax on the interest that would have accrued on the bonds to their stated redemption date in the RCCMS closing record.

On RCCMS, use disposal code 115, Full Bond Redemption Without Agreement, and ARDI Code 1-Fully Paid.