CPS Swapped Future for Cash – Chicago Tribune
From 2003 through 2007, Chicago Public Schools pushed forward with an “extraordinary gamble.” The district issued $1 billion worth of auction-rate securities, nearly all of it paired with complex derivative contracts called interest-rate swaps, in a bid to lower borrowing costs. As it turns out, the gamble likely will cost CPS an enormous sum, according to a first-of-its-kind analysis by the Tribune. Over the life of the deals, the district stands to pay an estimated $100 million more in today’s dollars than it would have on traditional fixed-rate bonds. Comment: This is the latest of a series of detailed, incisive