ATLANTA -- Tennessee has broken new ground in the municipal market with the first general obligation note sale to have liquidity support provided by the issuer.

Instead of backstopping a variable-rate issue with a bank letter of credit, the state has agreed to purchase any un-remarketed notes itself, using Tennessee's State Pooled Investment Fund. That fund, which invests money held by state and local governments in Tennessee, currently totals about $1.7 billion.

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