Dallas-Ft Worth airport is the latest victim of auction-rate bond failures.....

[marmar]

from Bloomberg:



Auction Failures Rise to 71% as Dallas-Area Airport Refinances

By Jeremy R. Cooke and Darrell Preston

March 28 (Bloomberg) -- Auction-rate bond failures rose to about 71 percent this week, forcing borrowers from Dallas and Fort Worth's airport to Ascension Health in Missouri to refinance the debt and avoid paying penalty interest rates.

The amount of auctions that failed to draw enough buyers to a market that also includes debt of student lenders and closed- end mutual funds increased from 69 percent last week, according to data compiled by Bloomberg. Rates are set through a bidding process managed by banks typically every seven, 28 or 35 days.

States and municipalities are fleeing the auction-rate market after it began collapsing about seven weeks ago as investors balked at buying the securities on concern about the creditworthiness of bond insurers guaranteeing the debt. Dealers stopped purchasing the unwanted debt, and the average rate for weekly municipal auction bonds rose to 6.56 percent on March 19, from 3.63 percent on Jan. 16, based on the latest public data from the Securities Industry and Financial Markets Association.

``The auction-rate market is just going to keep getting worse,'' said Michael Phemister, the vice president of finance at Dallas-Fort Worth International Airport, the world's third busiest airport by takeoffs and landings.

The airport, known as DFW and owned by the two cities, converted $337 million of auction debt to new bonds with fixed rates as high as 6.25 percent that will be paid through at least November 2009. Some of the penalty rates on the auction bonds were poised to go higher, after one insurer lost an investment- grade rating, Phemister said. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=abRsV3HPMYxE&refer=home