[graciegirl]

Originally Posted by villages07

Advo.... that $955M might be the total of bonds issued ... utility, infrastructure, and amenity ... but, certainly, folks realize that not every dollar of bond issue went into the Developers bank account. The bonds were issued to construct the infrastructure, construct the wastewater treatment facilities, construct golf courses and rec centers, etc. Those costs are a substantial part of the $955M, the developers net profit the remainder.

As to the question of bondholders.... most of the original bond purchases were done by mutual funds, hedge funds, and other high dollar or institutional investors. Over time, these entities have sold off bonds that have been purchased by smaller individual investors, so there is a mix.

I have purchased the numbered district CDD bonds from the resale market. I declined an opportunity to buy 5% tax free recreation/amenity bonds because of the uncertainty with the IRS investigation.

I can understand the IRS's concern about a developer controlled board issuing tax-free bonds...it does seem to stretch the definition of local government. I don't understand why this wasn't addressed when the bonds were first issued. The valuation method used for the amenities can be argued from all sides... the good news is future purchases of amenities will undergo much closer scrutiny.

Time will tell how this gets resolved. No reason to panic, but, good reason to stay informed.

Always informed, reasonable and well thought out posts from this poster. Always.