Private activity bonds

The Commercial Metals Company and the West Virginia Economic Development Authority took a chance by coming to market with a tax-exempt $150 million junk-rated private activity bond sale financing a scrap metal steel mill during uncertain times for the construction industry.

The downgrade pushes $2.2 billion of private activity bonds issued for the passenger train startup though the Florida Development Finance Corp. to junk.

The ratings agency changed its outlook on its BBB-minus rating to negative from stable Wednesday.

Attracting more private investment to the affordable housing sector is becoming more urgent with the reintroduction of a bill in the Senate that could spur the use of private activity bonds.

Construction problems and cost overruns for a bond-backed project pushed the company into a pre-negotiated Chapter 11 bankruptcy. 

A $300 million bond and a planned monkey breeding facility's fate are at stake in a legal struggle in Georgia.

With the threat to tax exempt municipal bonds looming in a Congress searching for pay-fors, private activity bonds supporting hospitals and higher education are high on the list of potential first targets.

Housing advocates concerned about the fate of private activity bonds are working on strategies for getting PABs and tax-exempt munis off the table while Congress searches for ways to pay for tax cut extensions.

The Affordable Housing Credit Improvement Act is reintroduced in the House of Representatives with bipartisan support to increase the development of affordable housing by leveraging private activity bonds and loosening restriction on Low Income Housing Tax Credits.

An Oklahoma agency is borrowing $1.15 billion through an unrated tax-exempt Public Finance Authority bond deal to build and equip a tire factory backed by Finnish interests.