The federal government will not reimburse issuers for original issue discount or pre-issuance accrued interest. See U.S. Department of Energy publication available online at http://www1.eere.energy.gov/wip/pdfs/qecb_creb_primer.pdf. See also Notice 2010-35.
For purposes of determining refundable credit payments under § 6431(b), as modified by § 6431(f), on a Direct Pay Tax Credit Bond or a Build America Bond, original issue discount (OID) (whether paid upon accrual, bond redemption, at maturity, or otherwise) is not treated as a payment of interest. OID is the excess of a bond’s stated redemption price at maturity over the bond’s issue price. See ARRA Conf. Rep. at 593, n. 146.
Notice 2009-29: Qualified energy conservation bond allocations for 2009.
Notice 2012-44: Guidance concerning qualified conservation purposes, including green community programs.