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California HSR will not serve San Francisco

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[quote user="blue streak 1"] [quote user="Sam1"] It is usually possible to sell debt, even it is junk, as long as the interest rate is high enough to justify the investor risk.  This is especially true if the issuer buys insurance for the bonds.  Unfortunately, poor bond ratings mean that the issuer will pay more in interest than if the bonds were of higher quality.  [/quote] If bonds were sold;  two items 1. Was is the face value interest rate 2. More important what are they selling for? ex;;    a $1000 face value bond at 10% is $100 interest a year if it sells for 1100 then the effective interest is about   9.09% interest. if it sells for $900 then the effective interest is    11.1% interest. so ntil we know the face values and the actual selling price we cannot know how much the bonds are costing.[/quote] What you say is correct, but the key point is that lower rated bonds, i.e. B+ compared to AA, for example, will cost the issuer more in interest.  Even a few additional basis points can add millions if not billions to the cost of the project over the life of the bonds, which will probably carry maturity dates up to 30 years. Most people, when they quote the cost of a project, fail to factor in the cost of the financing over the life of the project.
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