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I bought in Sept 08, an Alabama Jefferson County Muni Bond with a 5% coupon bought less than par, maturing Jan 1 2009. Couldn't find any good CDs for 5%. Only about 6 weeks to maturity on bond. See a problem here? I dont care that it is tax free. its the interest$ and $cost+ short maturity no brainer??
Jack4888
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No. of Recommendations: 6
I bought in Sept 08, an Alabama Jefferson County Muni Bond with a 5% coupon bought less than par, maturing Jan 1 2009. Couldn't find any good CDs for 5%. Only about 6 weeks to maturity on bond. See a problem here? I dont care that it is tax free. its the interest$ and $cost+ short maturity no brainer??

Did you know when you purchased the bond that Jefferson County, Alabama is in big financial trouble and is contemplating filing the largest municipal bankruptcy in US history? If they do file BK, do you know what will happen to the bond you purchased?

Here's a story from March 3 talking about how the county ran into trouble: http://www.bloomberg.com/apps/news?pid=20601109&refer=ho...

Here's a story from Aug 26 talking about the possibility of filing BK: http://www.nytimes.com/2008/08/27/business/27bama.html

Here's a story from today's Birmingham paper about how the county is asking for funds from TARP: http://www.al.com/news/birminghamnews/statebriefs.ssf?/base/...

(Some of the sites may require free registration)

The information about the potential BK was available before September, when you purchased, so if you weren't aware of the issues, then I would say it shouldn't have been a 'no-brainer'.

AJ
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