Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Municipalities Urged to Disclose Direct Bond Sales to Banks

Oct. 25 (Bloomberg) -- U.S. municipalities should make public disclosures about direct debt sales to banks, which are increasingly used in place of variable-rate demand bonds, Fitch Ratings said.

Because there is no disclosure requirement for direct bank placements, ratings companies and investors may not be aware of them, New York-based Fitch said in a statement today.

The direct sales tend to be bonds maturing in three to seven years that are privately placed with commercial or investment banks, Fitch said.

Many have a similar structure to variable-rate bonds, where the issuer must remarket or repurchase the debt at a certain time or face higher interest costs or a faster repayment schedule.

These risks may have “a negative impact on the credit profile of an issuer and possibly cause a rating downgrade if issuers must refinance or repay bonds in an accelerated timeframe,” Fitch Ratings said.

To contact the reporters on this story: Michelle Kaske at Greg Chang at;

To contact the editor responsible for this story: Mark Tannenbaum at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.