Yes, well because we all know the officials aren't on the take. It's not like the UC Board of Regents doesn't have massive ties to the financial elite, do they? That's just a well known example.
It looks like the banks did fine on this one. They priced the risk appropriately. 10:1 for a 20-30 year loan? Maybe go even higher. Their real sin was saying that junk mortgages were good and not collecting enough interest.
The article doesn't say, but I'm pretty sure the California School District is borrowing the money from the state itself. That makes the interest a non-issue because it doesn't matter if it is 1% or 100% per annum - the money just flows from one part of the government to another. The interest is just a form of accounting.
Now it would be a different matter entirely if the loan was made through a private bank. Then even an interest rate of 0.1% would be a waste of taxpayer funds as there is absolutely no reason not to borrow from the state itself. But that is not how it usually works since governments always are able to finance their loans themselves.
well according to cynwoody this $34m equates to a ~10% interest rate. Not sure why that's so terrible, if anything sounds cheap for a borrower of this credit quality and the duration of the loan (25+ years).
