Bond Accountability Commission 2 Recommendations Page 47
corporate rating scale, which is considerably different from a municipal rating scale. 47 In the context of those three layers of credit support, Delphis-Hanover Corporation provided a technical analysis of the yields in CMSD’s Bond and Note sales. That technical analysis by Delphis-Hanover Corporation appears in Appendix B hereto.
Bond & Note Yields Delphis Hanover reached the following conclusions, which are quite favorable regarding the results of CMSD’s Bond and Note sales— •
CMSD’s 2002 Bonds were sold “with a notably strong scale,” or in other words, with interest yields on each maturity that were lower than prevailing rates in the market for securities of similar maturities and a similar credit level
That strong scale (yield for each maturity) applies to all maturities of the 2002 Bonds
In fact, the prices were so strong that they “were better than triple-A uninsured bonds in the overall general market,” while insured bonds of other issuers were being sold in the market “at yields equivalent to those of a double-A rated bond”
As discussed in “Debt Enhancement Options” beginning at page 67, bond insurance actually has a default risk profile that is less favorable than CMSD’s own unenhanced unlimited tax (Issue 14) support.
Published on May 14, 2014