What does the opinion of bond counsel provide confidence in?

The opinion of bond counsel is critical in the context of issuing bonds as it provides assurance regarding the legal and tax status of the bonds being issued. This opinion is a formal legal document that asserts the legitimacy of the bond issuance under state and federal law, confirming that the bonds meet all legal requirements. This includes a declaration that the bonds conform to appropriated statutes and regulations, that the project financing is lawful, and that the interest on the bonds may be exempt from federal income tax, which is crucial for attracting investors.

By ensuring that all legal and tax requirements are satisfied, the bond counsel’s opinion plays a significant role in instilling confidence among potential investors. This assurance reduces the risk associated with investment, as knowing that all conditions for legality and tax-exempt status have been fulfilled enhances investor security and promotes marketability of the bonds.