Pennsylvania Localities Tap Swaps for Upfront Cash: Muni Credit
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Pennsylvania municipalities are turning once again to the kinds of derivative deals that backfired during the credit crunch as the lure of upfront cash and the potential to cut costs prove too hard to resist.
Dauphin County in July cleared the way to enter into an interest-rate swap on a deal that helped settle the debt of the formerly insolvent state capital Harrisburg. Berks County, which in 2009 spent about the equivalent of its parks and library budgets to end swaps, agreed to a new contract in March. Lancaster County in November and the Oley Valley School District in 2012 exited deals in exchange for immediate cash and new accords.