MSRB Chairman Says Firms Specialize in Negative Yields,
and Admits to Wide Price Spreads

In an interview given to The Bond Buyer (10/27/03), the new Chairman of the Municipal Securities Rulemaking Board (MSRB), Bill Jester, a Managing Director of UBS/Paine Webber, admits to the existence of negative yields in the Muni Markets, and says there are actually firms that specialize in negative yields.

Earlier this year, MunicipalBonds.com was the first to expose Municipal Bond transactions resulting in negative yields to customers. Further studies of the Muni industry's trade reports has uncovered thousands of negative yield trades.

Chairman Jester also admits to the existence of unfair and unreasonably wide spreads in the Muni Markets, and that the MSRB has even done a study on the wide spread problem. MunicipalBonds.com has been uncovering and exposing wide spreads for four years, and the MSRB has attacked us and fought us at every opportunity. So MunicipalBonds.com is happy the MSRB is finally admitting to the problem and agree something should be done.

However, MunicipalBonds.com would like to know why the MSRB doesn't want to do something themselves? It sounds like Chairman Jester is blaming the enforcement sector for the Muni Markets' problems??

—MunicipalBonds.com asks Chairman Jester and the MSRB to release their wide spread study for public review. We would like to see a copy.

—We also demand to see the list of firms who Chairman Jester has publicly stated specialize in Negative Yields. Considering you've done a study on wide spreads, we're presuming you've also done a study on Negative Yields...especially since you say there firms specialize in them...and ask you make public your Negative Yield study. We would like to see a copy of that too.

MunicipalBonds.com produces daily, quarterly and annual studies on the Muni Market's Negative Yields and Worst Spreads for public review. Please see Negative Yields and Worst Spreads sections at www.MunicipalBonds.com.

Contact: Kevin Olson
Company: MunicipalBonds.com
Phone: 415-922-7870
Email: Kevin@MunicipalBonds.com
URL: http://www.MunicipalBonds.com