Hotel Projects: Financing with Tax-Exempt Bonds
The Orrick Public Finance Green Book Series
February.01.2003
Tax-exempt bonds are generally the least expensive form of project financing and often require less equity to be contributed to a project than traditional sources of financing. Investors in tax-exempt bonds will accept a lower rate of interest because the interest received is exempt from federal income tax (and usually the income tax of the state in which the bonds are issued). Until recently, however, tax-exempt financing was rarely considered as an alternative for financing hotel projects.