CAB Restructuring Bonds are designed to help California school and community college districts convert costly capital appreciation bonds into lower-cost current interest bonds in order to help save millions of dollars in future interest payments.

Although the State legislature prohibited California K-14 districts from issuing long-term capital appreciation bonds with debt ratios of at least 4-to-1, beginning in 2014, the legislation (AB 182) did not address the $3 billion of high-interest capital appreciation bonds already issued by more than 200 districts between 2001 and 2013.

This debt, which could balloon to nearly $20 billion over the next 40 years if left unchecked, will be the responsibility of future generations of California taxpayers for decades to come. DS&C’s proprietary CAB Restructuring Bonds^® help districts mitigate this problem.