Piper Jaffray Cos. said last night it will discontinue its tender-option bond program as result of market dislocations.

The company said its TOB trusts can no longer rely on selling variable-rate certificates at lower rates than yields on the underlying long-term bonds, which is necessary for tax-exempt status. In addition, Piper Jaffray said it could not find a replacement at “economically viable pricing” for its trusts’ liquidity provider, which plans to exit the market at the beginning of next year.

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