Here's how the issuance of so-called "PERS bonds" are supposed to work: the borrower issues bonds that pay, for example, four percent interest. The borrower takes the proceeds of the bond issuance and invests them in stocks and private equity and earns, for the sake of argument, eight percent. That four percentage-point difference between borrowing costs and investment returns can then be applied to paying down PERS obligations. (And of course the exercise can fail if investment returns turn out to be less than the cost of borrowing. That has happened.)