LIBOR and the MunIcIpaL MaRket

and refunding transactions by locking in current market interest rates. Some state and local government issuers also create floating rate liabilities by using LIBOR-based interest rate swaps. By combining a fixed rate bond with an interest rate swap where the issuer receives a fixed rate and pays a floating rate based upon LIBOR, the fixed rates offset each other and the issuer’s net interest rate exposure is equal to the … ................
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