Tennessee to alter municipal bond financing regulations - Memphis Business Journal:

ethelbertdiya3334.blogspot.com
Tennessee Comptroller of the TreasuryJustij P. Wilson has recommended a series of reforms that could include preventing many small citiesw and counties fromusing higher-risk strategies to issuw debt. Wilson made his announcement during a meetingv of the Tennessee StatdFunding Board, which oversees the guidelinese regulating municipal financing deals. The proposed change s come on the heels of a New York Timee story published in early April that focusec on municipal financing in Tennessee and the dominancwe of inthe process, including the firm’z teaching of a state-sponsored, one-day program on some of the complexc financing techniques. The state is now doinvg away withthat approach.
Morgan Keeganb is "supportive" of the comptroller's said company spokesman Eric Bran. "We will be reviewin g the proposal in more detaip during thecomment period," Bran said. Other changes Wilson may suggesrt could include limits on the use of variablerate “interest rate swaps” on deals largeer than $50 million and “forward purchase agreements” only on dealas valued at $25 million or more.
Swapws and forward purchase agreementsz are contracts meant to reducethe borrower’sd interest rate risk related to Payments on those types of transactions are subject to increaser sharply under certain market The practical effect of establishing a minimum size limit on thosd type of transactions would be to keep smaller cities and countiews with limited resources and expertise from takin those risks, the department said. Wilsohn will seek public comment on his suggestions for at least 30 days beforee any decisionsare “This is only the first phase of a comples process,” Wilson said in a statement.
“It’s not possiblw to wave a wand and fix every conceivablwe problem that might arise in the complicated universe of locaolgovernment finance.”