Washington, D.C.’s Georgetown University on Wednesday said that some of its taxable auction-rate municipal bonds failed at auction, confirming what experts said was one of the first-ever such events.

Auction-rate debt is an instrument whose rates are reset periodically, and if an auction fails, the issuer must pay a higher penalty interest rate. An auction fails when no buyer can be found and the dealer does not take the paper back.

Posted: 01|31|08 at 8:33 am. Filed under: Auction News.