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1/22/2020 Denver Post investigation into Colorado's metro districts reveals billions in debt paid by homeowners <br />Although institutional investors such as banks and pension funds often buy <br />a metro district's bonds, The Post found that district developers, with <br />increasing regularity, are keeping the smaller junior bonds for themselves, <br />according to thousands of pages of bond documents reviewed by the <br />newspaper. <br />junior bonds generally have a higher interest rate of return and are repaid <br />only after the senior bonds are retired. As unpaid interest on the junior <br />bonds accrues, the potential paydays to the developers are impressive. <br />For example, the developer -controlled Big Dry Creek Metropolitan District <br />in Adams County in 2017 issued a pair of senior bonds totaling $11 million <br />at about 6% interest to cover the costs of building its infrastructure. They <br />were primarily sold to institutional investors and are to be paid over 30 <br />years. <br />The district also issued junior bonds for $1.8 million at 9% interest, also for <br />infrastructure costs. <br />Joe Amon, The Denver Post <br />Home construction continues at Thompson Crossing in Johnstown on Sept. 19, <br />2019. <br />The buyer of those junior bonds will see a $1.8 million investment become <br />a $22 million payday, according to bond documents. That's because no <br />payments are scheduled to be made to its investors for at least 20 years, <br />effectively ballooning the interest rate to 29.5%. <br />https://www.denverpost.com/2019/12/05/metro-districts-debt-democracy-colorado-housing-development/ 36 10/19 <br />