CHICAGO — Indiana would prohibit bond issuers from hedging more than 20% of their outstanding debt in a bill that passed the state Senate Tuesday and now heads to the House.

In addition to the 20% cap, the legislation restricts an issuer's interest-rate swap activity by prohibiting the use of interest-rate swaps as investments and requiring issuers' governing bodies to approve each new swap agreement with a resolution that includes a thorough analysis of potential risks.

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.