Local government and higher education – US: Overview of state aid intercept programs

Source: Susanne Siebel, Dan Seymour, Orlie Prince, Leonard Jones, Alexandra S. Parker, Moody’s, Sector Profile, February 1, 2019
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State aid intercept programs require a state to divert funding, originally intended for operations, to bondholders for debt service when a local government or higher education institution is unable to make the payment. With that bondholder protection, programs help entities access the capital markets. While all programs share the same goal, they vary widely in structure, timing and state commitment….