Word: bonde
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Dates: during 1980-1989
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...bondholders grumbled about "hometown referees" who were making investors all over the U.S. pay for mistakes made by officials in the Northwest. Recalling the famous New York Daily News front page describing President Gerald Ford's refusal to bail out a financially floundering New York City, one Manhattan bond trader growled, "If you could write a headline about the whole sorry affair, it would read, WASHINGTON STATE TO INVESTORS: DROP DEAD!" Critics point out that the Northwest has very low electric rates as a result of its cheap hydroelectric power. If the entire cost of all Whoops bonds were...
...Northwesterners are not getting off unscathed. Their electric rates have already risen to pay for Projects 1,2 and 3. Moreover, their utilities will have to pay exceptionally high interest rates to raise capital in the bond market. At the moment, many investors are shunning bonds from the Northwest. "The whole thing is a nightmare," says Paul O'Connor, press secretary to Governor Spellman. "If traders on Wall Street have the choice between something that says Washington on it or something that says Indiana on it, they are going to go for Indiana. We've got a cloud...
Investors will not be the only losers. As long as the fallout from the default hangs over the bond market, scores of electric utilities, and possibly other public agencies, across the U.S. will be facing higher interest rates to raise capital and will have to pass the added costs along to consumers and taxpayers. Either directly or indirectly, millions of Americans will be paying for the whopping blunders of Whoops...
Defaults on tax-exempt municipal bonds like those issued on Whoops have been relatively infrequent and have usually involved smallish sums. Only 685 defaults have occurred since 1940, out of 301,016 municipal bond issues. In terms of money lost, each of the three largest were around one-twentieth the size of last week's fizzle. The West Virginia Turnpike Commission defaulted on $133 million in bonds in 1958. Chicago's Calumet Skyway collapsed under bond indebtedness of $101 million in 1963, and investors were short-changed in 1978 when the Chesapeake Bay Bridge and Tunnel Commission reneged...
Until the Whoops debacle, the biggest bond defaults had come in the private sector. The Penn Central ran out of cash bonds June 1970, forcing it into what remains America's biggest bankruptcy: $3 billion in liabilites, including $1 billion worth of bonds...