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Article: GUEST WORDS: How to Revive the Muni Market: A Modest Proposal.(Commentary)
- Article from:
- The Bond Buyer
- Article date:
- September 28, 2009
CopyrightCOPYRIGHT 2009 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Robert C. Barnes and Donald L. Hunt
Since last fall, new issues of less than double-A rated municipal bonds have been severely constrained. Why should we care? Because these bonds are typically issued by governmental and tax-exempt entities, often to fund shovel-ready projects ranging from bridges to hospitals - and the failure of that market continues to seriously crimp a national economic recovery.
The problem came about with the en masse downgrading of all of the major municipal bond insurers beginning in 2007 and accelerating since September 2008.
Bond insurance is used where the credit rating of the issuing entity - in this case, a ...