what is negative arbitrage 
negative arbitrage is the opportunity lost when bond issuers assume proceeds from debt offerings and then hold that money in escrow for a period of time usually in cash or short term treasury investments until the money is able to be put to use to fund a project or to repay investors negative arbitrage may occur with a new bond issue or following a debt refinancing the opportunity cost occurs when the money is reinvested and the debt issuer earns a rate or return that is lower than what must actually be paid back to debt holders 