The financial crisis - which led to Lehman Brothers' bankruptcy filing and virtually locked up the variable-rate demand obligation market along with the auction-rate securities market - has led municipal issuers to question how to calculate bond yield for arbitrage purposes in these extraordinary situations.

Lehman's bankruptcy filing is leading to the termination of interest rate swaps that the firm had entered into with muni issuers, causing issuers to make termination payments and to question how those payments should be taken into account in calculating bond yield, according to bond lawyers.

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