Bond Buyer reports "New Player Seeks to Revive VRDO Market." It says, "Clarity Bidrate Alternative Trading System, a division of Arbor Research & Trading, LLC, is signing up investors and lining up potential issuers for an attempt to "revolutionize and rejuvenate" the variable rate demand obligation market. "Our goals include deepening and broadening the market, a high degree of transparency, centralizing the market and using competitive pricing," Clarity's chief executive officer and president, Robert Novembre, said in an interview last month.... VRDOs are long term municipal bonds with floating interest rates that are reset periodically, typically weekly.... In 2008, however, the collapse of Lehman Brothers triggered a run on the securities. The average VRDO rate shot up to almost 8% from under 3%, as investors worried about whether banking institutions that provided liquidity facilities to back the securities would be able to meet their obligations, according to a June research report from the Federal Reserve Bank of Atlanta. Issuance of VRDOs has fallen to about $11 billion in 2014 from nearly $120 billion in 2008, according to the Municipal Securities Rulemaking Board. The par value of VRDOs outstanding has slipped to $207 billion from $222 billion in March 2014.... The system promotes transparency, offering real-time empirical data not available in today's market, pre-trade/execution information and competitive pricing, he said. The system seeks to level the playing field, promoting a deeper and wider investor base. By providing easy access and a place where investors and issuers can meet directly in an unbiased market not influenced by a middleman, the system should increase the potential for new issuance, Novembre said." Also, The Wall Street Journal reports, "J.P. Morgan's Profit Rises; Results Beat Expectations." It says, "The bank has also reached its goal of reducing certain deposits, known as non-operating deposits, by more than $100 billion, largely through its corporate and investment bank unit in addition to its commercial bank and asset management units, Ms. Lake said on a call with analysts."
