In Their Own Assets, Municipalities See Opportunity For Credit Enhancement

Constrained by tightening budgets, many state and local governments, and other entities nationwide are considering innovative financing techniques to sell their bonds. One solution many municipalities are turning to entails using existing assets, like pension funds and land grants, to guarantee local bond issues. While the phenomenon does not yet pose a threat to private bond insurers, the industry is watching the developments closely, particularly with overall volume expected to decline.

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