A spate of failed auctions for issuers in New York that began Monday and expanded yesterday sent interest rates on some auction-rate bonds as high as 15% and 20% and issuers scrambled for solutions to the higher rate resets.

The failures didn't come as a big surprise to market participants who had seen volatility in the auction-rate market for months and some issuers are converting auction rate to variable-rate demand obligation bonds.

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