Auction Rate Securities (ARS) Prospects Depend On the The Type of Issuer: Beware Student Loan Trusts and Collateralized Debt Obligations (CDOs)

While much has been made of municipalities' and many closed end-funds' successful efforts and continuing efforts to provide investors liquidity, those ARS purchasers with student-loan trusts and collateralized debt obligations (CDOs) still have much to be concerned about.

A recent article by Barron's provided the following "outlook" for student loan ARS: "Absent a government bailout, likely to stay outstanding." Similarly, the outlook for CDOs is: "Likely to remain outstanding."

That's unfortunate. The two types of ARS are, in reality, 30- to 40- year notes!

SNSFE attorneys continue to investigate and counsel investors in how best to extricate themselves from this debacle!

Source: Barron's