At least nine Mutual Benefit Life Insurance-backed housing issues have begun the countdown to mandatory redemption, and unless project owners can obtain a new guarantor for three of the deals by Aug. 13, bonds will be called in September.

A mandatory redemption could prove disastrous to both bondholders and project owners because in almost every deal the only assets to pay the bonds off are the projects themselves, according to analysts. In the worst-case scenario, the bondholders -- through the sale of the developments -- would realize far less than their par investments.

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