Managing bond proceeds improves financial performance.

Abstract

Healthcare organizations must actively manage tax-exempt bond proceeds after they are initially invested at the time of financing or refinancing. The Tax Reform Act of 1986 imposes serious penalties on issuers who fail to comply with its complex requirements. An active program of bond proceeds management enables organizations to avoid this pitfall and take advantage of legal investment opportunities. Such a program must start with a set of clear guidelines on permitted investments, target rates of return, acceptable levels of risk, and liquidity requirements.