S&P's downgrade impacts local bonds | August 12, 2011 | Pleasanton Weekly | PleasantonWeekly.com |


Pleasanton Weekly

Opinion - August 12, 2011

S&P's downgrade impacts local bonds

Despite the media frenzy, a day of Wall Street losses and political prognostications, the impact of Standard & Poor's downgrade of U.S. government debt from Triple A to AA+ has had little impact locally except for debates and conversations at the local coffee houses. Normally, a downgrade means interest rates should start to rise. But just the opposite has happened, so far. The city of Pleasanton, in fact, is losing out, albeit slightly, by the recall Monday of several million dollars in Treasury bonds where it has salted away reserves. These were bonds with 1-1/2 to 2-1/2 years to run, which was considered a good short-term lifespan. They have now been reissued at lower rates of return with a fractional, yet less positive yield.

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