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corporate purchasers of the Series 1991 Bonds should consult their professional tax advisors concerning the potential impact of receipt of interest income on such bonds upon their Federal tax liability. Financial Institutions' Costa of Carrying Tax-Exempt Bonds Under the Code, financial institutions are denied 100 percent of the interest expense deduction that is allocable, by formula, to the carrying of tax-exempt obligations acquired after August 7, 1986; the former provision of the Internal Revenue Code of 1954, which provided for a 20 percent disallowance of the interest expense deduction, continues to apply with respect to tax-exempt obligations acquired on or before August 7, 1986, as well as to new issues specifically designated as "qualified tax- exempt obligations" under Section 265 of the Code. The Series 1991 Bonds have not been designated by the County as "qualified tax-exempt obligations" for the purposes of Section 265 of the Code. (� /Ae yers Original Issue Discount "5"173v4e'- /,71Y1 S7.'9.1e 4w- / 62/'‘ In the opinion • Bond Counsel, under existing law, the original issue discount in the selling price of each Series 1991 Bonds maturing en- , to the extent properly allocable to each holder of such Series 1991 Bond, will be excluded from gross income for federal income tax purposes with respect to such holder. The original issue discount is the excess of the stated redemption price at maturity of such Series 1991 Bonds over the initial offering price to the public, excluding underwriters and other intermediaries, at which price a substantial amount of such Bonds were sold. Under section 1288 of the Code, original issue discount on tax-exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to a holder of a Series 1991 Bond who acquires the Series 1991 Bond in this offering during any accrual period generally equals (i) the issue price of such Series 1991 Bond plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity of such Series 1991 Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), less (iii) any interest payable on such Series 1991 Bond during such accrual period. The amount of original issue discount so accrued 29