I see similar things happening with rating agencies (though I think they will always be around, maybe just in a different form). When the trust breaks down, why do it?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSt9mAsai4Mw&refer=home
State and local borrowers are discovering that buying municipal bond insurance from MBIA Inc. and Ambac Financial Group Inc. is a waste of money.
Wisconsin sold $154.6 million of general obligation bonds last month at interest rates usually available only to borrowers with the highest credit ratings. Wall Street firms didn't require the state to insure the bonds, even though Wisconsin is graded four levels below AAA, amid signs that bond guarantors may lose their own top rankings.
This seems ridiculously low with inflation risk coming but I am not a muni expert.
When Wisconsin sold $154.6 million of bonds for highways, public buildings and water improvements on Nov. 15, it paid a yield of 3.87 percent for debt due in 2016.
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