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Brown Spurs Rally With School Zero-Coupon Limit Law: Muni Credit

Bonds issued by California school districts that defer billions of dollars in interest payments for decades are rallying to a five-month high as Governor Jerry Brown prepares to sign a bill limiting their use.

The measure the 75-year-old Democrat is considering passed unanimously. It would cap interest on securities known as zero-coupon capital-appreciation bonds at four times the principal, and limit maturities to 25 years from the current 40. A school-finance lobbying group dropped its opposition to the bill.