Often big banks can afford to wait on a payment, or just roll over an asset once mature. This relieves the issuer from the real pressures of making their debt good.
These new rules are good, solid rules and good for the economic interests of all Americans.
Which is why the bond holders require in the covenants that these agencies tax or raise utility rates so that the agencies have cash + some percentage on hand that exceeds that annual bond payment.
So if an agency sold $5 Million in bonds at 20 years and 5% the annual payment is $260,000. But the covenants require 150% cash reserve on hand that requires the agency to have $390,000 on hand. Failure to do so can result in penalties from the bond holders and reduced credit ratings and higher interest rates for the next bond sales.
“These new rules are good, solid rules and good for the economic interests of all Americans.”
The feds have the option of printing money to pay off bonds. This is not fair to the other municipal levels. This is a power grab, nothing else.