Quote:
Originally Posted by Enoch Root
I am not trying to be condescending here. I have worked in the bond markets for decades and I am simply trying to provide some clarification on one issue in which I can, in a thread that is chock full of opinions and in some cases inaccuracies.
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Do you work in investment banking or brokering? The reason I ask is because pricing on bonds is heavily dependent on leverage. Admittedly I don't know how municipal bonds get priced, but any investment grade notes are going to be dependent on market as well as how levered the city is. Presumably this could impact their ability to get financing in the future.
For example if they go out and get this at 3.25%, the next time they go to market, given the additional debt they've taken on, they might get 3.5% (assuming all other things being equal).
That extra .25% over 20 years isn't insignificant.