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We are The Little Board [not The Big Board] ."OTC alt-Bourse" |
| Auction-rate
securities (ARS)
OTC Description ARS are longer duration securities that changed hands at frequent auctions, at par,at variable short-term rates. ARS gained widespread popularity because of the slightly higher yields they carried over money-market funds, and the market grew to $330 billion in late 2007. The largest issuers of auction-rate securities had been closed -end investment |
funds (utilizing preferred shares), student loan lenders, and municipalities. To a lesser extent, issuers included corporations and collateralized debt obligation funds. Originally, auction-rate securities were highly liquid, variable-rate securities that had interest rates reset through a “Dutch auction” process, . typically every 7, 28, or 35 days, providing liquidity to holders at par. Since February | 2008, the ARS marketplace has experienced widespread auction failures that have left hundreds of billions of dollars “frozen” in now-illiquid ARS. Auction failures persist as the original auction model is broken, and Wordbridge is emerging as the alternative bourse for the approximately $160 billion in ARS that remain in the marketplace (Home) |
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