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Chicago Tribune, December 26, 2014 - Heather Gillers "Some have recouped millions from risky type of debt that plagues CPS"

In "Some have recouped millions from risky type of debt that plagues CPS," Heather Gillers reports on the success some municipal issuers have had in recovering losses suffered as a result of following investment banks advice to issue auction rate securities and simultaneously enter into interest rate swaps rather than issue fixed rate debt. Issuers like the Chicago Public School System suffered large losses when the ARS clearing rates rose relative to the floating rate leg of the swap contracts and the mark to market value of the swaps dropped dramatically. The article quotes Craig McCann about the defects of synthetically fixing rates suing this combination of ARS and derivatives.

 
Craig J. McCann
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