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September 16, 2011

Finance, etc.: Denver Public Schools’ bond deal a case study for seminar

By Heather Draper

The Denver Public Schools $792 million municipal bond, which got some unwanted national publicity in The New York Times last year and at a Securities and Exchange Commission hearing in late July, now has the attention of academics.

The DPS variable-rate debt issue will be a case study at the 2011 Financial Management Association annual meeting in Denver on Oct. 20 at the Sheraton Denver Hotel.

“Issues and challenges in structured municipal debt: A case study and call for research” will be one of many seminars conducted at the gathering of about 1,000 finance professionals and academics from around the world.

The keynote speaker at the conference will be Myron Scholes, a Nobel Prize-winning economist and author of the Black-Scholes equation to determine the value of derivatives. (I recall that David Milstead, my colleague at the Rocky Mountain News, used to get really excited about wonky things like the Black-Scholes equation.)

A write-up about the DPS seminar on FMA’s website says: “The session will use a structured debt transaction entered into by the Denver Public Schools (DPS) in 2008 as a way of introducing the many factors that play a part in municipal finance and then discuss how the academic community might contribute to more informed decision-making and greater transparency.”

Panelists will include Alexander Arapoglou, professor of the practice of financial management at the University of North Carolina-Chapel Hill, and Joseph S. Fichera, founder and CEO, Saber Partners LLC.

I’ve been following the bond issue since I started here in January, because the district was forced to refinance it this spring when the bank backing the debt said it would no longer do so.

And I’d have to say, it never got any easier to understand. Maybe academic-types will be able to shed some light on it.

© 2011, Denver Business Journal, September 16, 2011


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