Pension funding bonds, also known as pension obligation bonds, rarely improve the credit quality of the state or the local government that issues them, says Moody's Investors Service in a report.
Moody's: Pension Funding Bonds Bring Risks to State and Local Governments
DEC 11, 2012 11:47am ET
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A recent phenomenon is the emergence of bonds with shorter call protection as funding alternatives for municipalities. However, the shorter call protection also dampens the potential upside for investors, which in turn reduces the price they are willing to pay.
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