Thursday, March 10, 2011

Wall Street Pounces On Distressed Muni Deals

As conditions in the corporate bond market improve—limiting potential gains for bottom-fishing investors—private equity firms and Wall Street banks are seizing opportunities in the $28 billion market for distressed municipal bonds. The investors are using a strategy borrowed from the corporate bond world known as "loan to own," which involves buying debt to gain control of revenue-producing municipal projects.

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