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Tax Exempt Enhanced Municipal Security (TEEMS)
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A synthetic reverse floating rate note created when a municipal issuer enters into an interest rate swap agreement which permits it to enjoy fixed interest costs over the life of the instrument but to pay investors an inverse floating rate for the life of the swap. Alternately, the fixed rate issue can be divided into two tranches: a floating rate note and a reverse floating rate note. The fixed rate payment is apportioned between the tranches to create the necessary cash flows. See also Residual Interest Bonds (RIBs), Select Auction Variable Rate Securities (SAVRs).
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