Tuesday, November 29, 2011
Sewer revenue bonds, the price bite just went up
This bankruptcy will affect the price of the 50 million in new sewer infrastructure bonds the city wants to float.
Comment from the Wall Street Journal/Kelly Noland, 11/29/11, "Muni Market Sounds Alert". The bankruptcy filing of Jefferson County, Ala., has caused alarm bells to ring in the municipal-bond market. Lawyers for the county, which in November filed for what could become the largest municipal bankruptcy in U.S. history, are arguing that holders of $3 billion in debt used to finance a sewer project should be forced to wait for their money along with other creditors. That has caused a stir in the market because the sewer bonds are classified as revenue bonds. Those bonds are considered among the safest to own because they are backed by a specific revenue stream.
Submitted by Jim Wagner
Posted by Kathy Meeh