A municipal bond, popular in the USA and usually thought to be quite a safe bet, is debt issued by a state, municipality or county to finance some capital expenditure. They say everything’s bigger in the United States, and the Washington Public Power Supply System (WPPSS) proved that bond defaults are no exception.
During the 1970s and 1980s, WPPSS issued $2.25 billion of bonds which were to be used to finance the construction of some nuclear power plants in Washington State.
In 1983 WPPSS (or Whoops) declared that it would not be able to repay the billions of dollars of debt due to extremely poor project management, which had led to the cancellation of construction and abandonment of the power plants that had already been built.
This fiasco was (and still is) by far the biggest municipal bond default in history, which robbed thousands of members of the American public…Whoops!
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