An opinion provided by a bond counsel to a municipal bond issuer is an unqualified opinion. Typically, there are no objections that directly address the subject. An attorney representing a corporation’s interests during a bond offering is known as a bond counsel.
The best opinion an issuer can get on municipal securities concerns is an unqualified opinion of the bond counsel. If you wish to start issuing municipal securities, you should consider getting legal representation from a bond attorney. You are good to go if the attorney gives you an unqualified opinion.
Thoughts On Unqualified Legal Opinion
When municipal bonds are traded to public issuers, they typically look into legal possibilities regarding the bonds’ tax status as well as the issuer’s ability to distribute the bonds. Therefore, a bond counsel’s unqualified opinion signifies that they have no concerns and believe the entire matter to be a binding contract between the county or municipality.
Additionally, they guarantee that the investors’ interests won’t be subject to federation tax or any other form of taxation. If a bond is issued with a qualified opinion from the bond counsel, it signifies that, among other things, the bond has problems with its tax status. It merely signifies that something is wrong with the municipality bond’s issue. Most of the time, getting legal advice for municipal bonds is expensive.
Because of this, municipal bond small matters will not seek legal advice; instead, they will be referred to as ex-legal. Since the entire process is already pricey, it will make sense to save money.
Qualified Legal Opinion
A reasoned opinion is another name for the bond counsel’s legal opinion. This indicates that the advice is conditional. Legal counsel is typically not deemed qualified if it is subject to restrictions, accepted practices, and standards. Legal opinions are stated to often be unqualified in the municipal securities market.
These bonds were issued legally without receiving a legal opinion, as was previously indicated. Due to the lack of a legal endorsement, you should exercise caution while dealing with ex-legal bonds as an investor. A lawyer or bond law firm has provided legal advice on most municipal bonds.
These law companies are involved in the situation for them to provide a legal opinion on the validity of the bonds and other matters like the tax treatment and interest rates to be charged. Such a decision is necessary for the issuers and investors to make decisions. The opinion for the bonds attests to the bond’s proper authorization and execution and its validity and legally binding on the issuer.
The attorney bond has not verified the ex-legal bond to see if it complied with the law and other standards. Technically speaking, this indicates that ex-legal bonds are subject to more legal risk exposure than other types of bonds.