‘Weird’ Muni Bond for Virginia Tire Recycler Offers Juicy Yield, No Risk
- Escrow bonds with mandatory put preserve tax-exempt allocation
- Structure delivers ‘free lunch, dinner and dessert’ for buyer
PRTI already recylces tires at a facility in North Carolina.
Source: PRTI IncMunicipal bonds can often seem like the quirky cousins within the $53 trillion US fixed-income market. But sometimes being a little weird pays.
Consider the $65 million in environmental improvement revenue bonds sold last week by the Southampton County, Virginia, Industrial Development Authority for a new tire-recycling project. The facility, to be located at a logistics center in the southeastern portion of the state on the border with North Carolina, will “demanufacture” car and light truck tires into scrap steel, solid fuel, liquid fuel and syngas, according to the preliminary official statement to the bonds. A private company, PRTI, is running the project and will be the ultimate borrower.