Bond insurer pulls out from new Oklahoma projects
Mon Dec 27, 2004 05:50 PM ET
OKLAHOMA CITY, Dec 27 (Reuters) - A major insurer of municipal bonds is declaring a moratorium on doing business with the state of Oklahoma due to a failed bond project for financing of a county jail, a state official said on Monday.
Office of State Finance Director Scott Meacham said MBIA Inc. (MBI.N: Quote, Profile, Research) is refusing to insure any more municipal bonds in Oklahoma after the Grady County jail, in Chickasha, Oklahoma, announced it could not make payments on $17.5 million in bonds issued to cover costs of a new, state-of-the-art detention facility.
Officials, inmates and workers at the jail began moving out this week after a stopgap financing measure did not make it out of the state house, Meacham said.
The move leaves only three major bond insurers left to do business with the state, Meacham said, adding the remaining insurers will likely raise rates on future issues in the state.
"Oklahoma has a black eye in the financial community," Meacham said.
Officials for MBIA were not immediately available for comment.
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It appears that Oklahoma is not OK!
Who is next?
Mish |
