Allina’s Bad Deals and Big Debts
By Mathew Keller
and Jordan Ash
We’ve seen that Allina is taking on more and more debt, $880 million in all. We’ve seen who benefits from that debt (hint: look to the Board). Today, we look into a particularly bad deal Allina made with UBS Securities and another big bank; a deal that led to losses in the tens of millions, a lawsuit; and the intervention of Minneapolis and Saint Paul.
Auction rate securities (ARS). They were popular back before the financial crisis, and the big banks loved them. Like most of the financial instruments that tanked in the recent recession, though, they’re completely made up.
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