WASHINGTON - Georgetown University this week restructured $115 million of auction-rate securities into variable-rate demand obligations using an increasingly popular technique: leveraging joint support from both the liquidity provider and the issuer.

Rating agencies say the technique is becoming increasingly popular among issuers that convert ARS to VRDOs and essentially allows default risk to be spread among the provider of the VRDO's letter of credit and the issuer so that the securities will be assigned a higher credit rating.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.