The California Public Employees’ Retirement System investment committee voted Monday to double the authorized size of the system’s credit enhancement program.
The committee voted to increase the program’s capacity to $10 billion from $5 billion, and eliminate a $250 million cap on individual transactions, CalPERS spokesman Clark McKinley said.
The three-year-old program offers letters of credit and liquidity support for issuers of variable-rate debt.
The staff recommendation in favor of the proposal noted that recent turmoil in the municipal markets, including downgrades of monoline bond insurers and the collapse of the auction-rate market, has made the credit enhancement field much more profitable.
The CalPERS credit enhancement program currently backs about $2 billion of debt.
