hedge bond
Defined in 1 place of the United States Code.
For purposes of this subsection, the term “hedge bond” means any bond issued as part of an issue unless—
(i) the issuer reasonably expects that 85 percent of the spendable proceeds of the issue will be used to carry out the governmental purposes of the issue within the 3-year period beginning on the date the bonds are issued, and
(ii) not more than 50 percent of the proceeds of the issue are invested in nonpurpose investments (as defined in section 148(f)(6)(A)) having a substantially guaranteed yield for 4 years or more.
Source
- 1994–present26 U.S.C. § 149Internal Revenue Code · Bonds must be registered to be tax exempt; other requirements · in this section