Legacy Park in Mesa, Ariz., spread over 320 acres, filed for bankruptcy in May, 15 months after it opened and three years after a local government entity agreed to issue muni bonds to pay for the park’s construction. The bonds recently traded at roughly 10 cents on the dollar, and the park is looking for a buyer. The local entity that issued the bonds is known as a conduit issuer and, unlike a city or town that issues muni bonds, bears no responsibility for repaying the debt. The park’s financial troubles have raised questions about whether the conduit setup, in addition to often being complicated and risky for investors, is vulnerable to abuse.
Source: WSJ.com: Markets
