The Impending Repeal Of The Bearer Bond Exception

Law360, New York (March 12, 2012, 1:22 PM EDT) -- On March 18, 2010, President Obama signed into law the “Hiring Incentives to Restore Employment Act” (the “HIRE Act”), which included a provision that generally repeals the foreign targeted obligation exception for bearer bonds issued after March 18, 2012. This repeal will likely dissuade many U.S. issuers from issuing bearer bonds, as they will no longer be entitled to the tax benefit of deductions for interest paid on such bonds.


Under current law, adverse tax consequences are imposed on issuers of bearer bonds (i.e., bonds...
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