WASHINGTON -- A proposed deal between Minnesota and Northwest Airlines to issue $699 million of lease-backed bonds could end in disaster if the airline goes bankrupt and leaves state and local authorities holding the bag to pay the securities, Standard & Poor's Corp. warns in an article scheduled for today's Credit Week Municipal.

Like a growing number of deals between state authorities and financially strapped corporations, the Minnesota deal is aimed at keeping and expanding the corporation's business in the state by offering to put the good credit pledge of the state and municipal organizations behind what essentially is a corporate "junk bond" financing, the agency says.

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