Regions Bank and Morgan Keegan, both part of Regions Financial Corp., are working together to help educate businesses and local governments on the new Gulf Opportunity Zone Act and how they can rebuild in the wake of last year's devastating hurricane season by taking advantage of special tax incentives.

Application for Tax-Exempt Bonds from the Governor of Alabama

What is the GO Zone?
The Gulf Opportunity Zone Act (GO Zone) was signed into law by President Bush on Dec. 21, 2005. It established tax incentives and bond provisions to support the rebuilding of and capital investments in local and regional economies in parts of Louisiana, Mississippi and Alabama that were devastated by the hurricanes in 2005. The GO Zone encompasses more than 20 parishes in Louisiana, approximately 50 counties in Mississippi and 11 counties in western and southern Alabama.

The GO Zone legislation allows private business owners and corporations to borrow capital through tax-exempt financing to acquire, construct, reconstruct or renovate non-residential real property, qualified residential rental projects, and public utility property in the affected areas. Tax-exempt borrowing provides lower cost of capital than conventional debt financing. Alternatively, the borrowers have the opportunity to take accelerated depreciation in the first year equal to 50% of the cost of new capital investments.

GO Zone bonds must meet certain guidelines, including:

• Must be located within the Zone.
• 95% or more of net proceeds are used for “qualified project costs”.
• Projects must be approved by the Governor of the State.
• Bonds must be issued by Dec. 31, 2010.
• Election for depreciation benefit expires at end of the 2008 calendar year.

What types of business are eligible for this financing?
Tax-exempt financing has been largely limited to governmental agencies or not-for-profit organizations. However, under the GO Zone Act, a wide range of businesses, including public and private corporations, retailers, commercial developers, utilities and hospitals, have the opportunity to build or rebuild at interest rates that can be as much as 1.5% to 2% below conventional financing options.

Why Use Regions and Morgan Keegan?
With dozens of bank branches and investment banking offices in the GO Zone region, Regions Bank and Morgan Keegan are uniquely positioned to provide turnkey underwriting, credit enhancement services and bond trustee services to GO Zone borrowers. Both firms have extensive experience in handling all aspects of financing transactions for borrowers.

In conjunction with Regions Bank commercial relationship managers, Morgan Keegan investment bankers can help borrowers evaluate the benefits of tax-exempt debt vs. other financing alternatives. The firms also help borrowers navigate through the complex and likely unfamiliar process of debt offerings as well as assist with the required state approval process.

Securities offered through Morgan Keegan are not FDIC insured, not bank guaranteed, and may lose value.