Thursday, April 03, 2008

Refinancing of auction-rate securities makes a little progress

Just to illustrate how one part of the process for unwinding the auction-rate securities logjam works, here is the Business Wire press release for the Fitch rating of the issuance of new bonds for the Oakland Joint Powers Financing Authority with the proceeds to be used to refund at least a portion of the authority's lease revenue bonds which are auction rate securities. This will put a small pile of cash in the hands of the funds which hold the auction-rate securities. This is just a drop in the bucket, but does illustrate how the unwinding is progressing. As the release tells us:

The 2008 series bonds are expected to sell via negotiation on Apr. 16, 2008. The 2008 bonds will refund the authority's lease revenue bonds (Oakland administration buildings), 2004 series A-1 and A-2 (auction rate securities).

There is still a very long way to go, but every increment of progress helps.

-- Jack Krupansky

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