Reconciling Muni Direct Loans With Securities Laws

Law360, New York (June 13, 2012, 1:11 PM EDT) -- Traditional public municipal bond offerings have steadily declined over the past several years.[1] Volume was down by as much as 32 percent in 2011 compared to 2010.[2] At the same time, alternative financing methods, such as direct bank loans to municipalities, appear to have grown dramatically in popularity.[3]

The reduced availability of bond insurance and the increase in the number of distressed municipalities have drawn both greater scrutiny and enhanced regulation of the municipal bond market from the U.S. Securities & Exchange Commission and the Municipal...
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