Will the deepening nationwide credit crisis torpedo the UO basketball arena?
The UO has proposed borrowing $200 million for the new arena through the bond market. But the New York Times reported today that the weakened condition of two large bond insurers has become a “potential time bomb” for such borrowing.
The bond insurers have reportedly lost billions by mixing themselves up in backing risky subprime mortgages. Without sound insurers for bond issues like the UO’s $200 million, investors may not be willing to buy the UO’s debt at affordable rates.
The Times reports: “The insurersâ€™ problems are also spilling over into the municipal bond market, making it harder for cities, counties and states to raise money for projects.”