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CU earmarks 50 million for local government bonds
RALEIGH, N.C. (11/13/08)--A credit union in North Carolina buoyed its support of local government by committing $50 million in investment funds for municipal bonds in the state. Local Government FCU, an $829 million asset credit union based in Raleigh, said that starting immediately, it is in the market to purchase municipal bonds from North Carolina's cities, towns and counties. The announcement comes as the national credit crunch and nervousness in the investment market has investors sitting on the sidelines, the credit union said in a press release. As a result, there is a lower demand for municipal investment instruments, which means key infrastructure projects in the state are delayed. The credit union said it has two purposes in earmarking the funds:
* It will be investing in ultra-sound investments that will complement its balance sheet; * It wants to encourage other institutional investors to return to North Carolina municipal bonds.
"Financial leadership will help keep North Carolina ahead of the economic crisis," said Maurice Smith, president of LGFCU. "For institutions that do business in North Carolina, we have an obligation to support our communities by showing diligent faith in our neighbors. North Carolina local governments have merited our confidence in their wherewithal to manage risk and attend to the needs of our citizens. Investing locally has appeal for us," he said. Government entities sell municipal bonds as a way to raise funds for public projects such as schools, courthouses, water/sewer infrastructure, roads and more.
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