The largest public pension scheme in the US will double its capacity for providing letters of credit and liquidity lines to domestic municipal bond issuers, as it moves to take advantage of this increasingly lucrative market where issuers have been hit by the downgrading of monoline insurers.
The $240bn (â¬155bn) California Public Employeesâ Retirement System yesterday voted to double the capacity of its internally managed credit enhancement programme from $5bn to $10bn. It also agreed to remove a restriction that prohibited the fund from backing bond issues worth over $250m.
