Chula Vista Tells A Wall Street Lie

Recently the City of Chula Vista in California paid big fees to Wall Street firms and lied about the consequences of the transaction.

On February 12, Chula Vista issued $350 million in pension obligation bonds that it claims allow it to convert 7% debt to 2.54% debt. But no such conversion took place. As explained here, POBs don’t convert debt. They increase pension assets.

POBs are nothing more than interest-bearing and fee-generating accounting schemes. Local governments should just say no.

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