Alabama Utility Shows How to Win Back Bank Swap Fee: Muni Credit
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An arbitration ruling in favor of an Alabama sewer company that fought its bank and recouped payments on failed interest-rate hedges may have implications for municipalities facing similar fees.
Baldwin County Sewer Service LLC, which serves almost 15,000 customers in southern Alabama, sold variable-rate debt starting in 2002 and entered interest-rate swaps to lower borrowing expenses, only to have the agreements blow up and raise costs.