Standard & Poor’s last week affirmed the AA-plus rating with a stable outlook on New Mexico’s $362.7 million of general obligation debt. Credit analyst Sussan Corson said the rating is based on the state’s sustained good financial performance, stable and gradually diversifying economic base, and moderate total tax-supported debt. “We believe New Mexico’s continued employment and personal income growth and high oil and gas prices for the near future should support income tax and energy-related taxes and fee revenues for the general fund,” Corson said. At the end of fiscal 2006, total tax-supported debt was $1,133 per capita. New Mexico’s GO and severance tax issues are retired over a very rapid 10 years. The state, with a population of almost two million, has a large public sector and an expanding service industry that limits its exposure to national economic cycles. New Mexico’s dependence on national defense spending has diminished over the past 15 years, but defense-related employment remains significant. Employment growth averaged 1.9% annually between 2001 and 2006, Standard & Poor’s said, as unemployment dropped to 4.3% in fiscal 2006 from 5.3% in fiscal 2005. As of June 30, 2006, state coffers included $359.5 million in the operating reserve, $254.4 million in the tax stabilization reserve, $99.7 million in the appropriation contingency fund, and $84.6 million in the tobacco settlement permanent fund reserve. General fund recurring receipts increased by 13.7% in fiscal 2006, contributing to an ending fund balance of $798 million. The state estimates the fund balance at the end of fiscal 2007 at $605 million.
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"Bond market investors are all wishing that April was behind us as they are anxious to hear the Fed's statement at its next FOMC meeting," noted BofA Global Research. "The statement should be no surprise as the market consensus has converged to 'higher for longer' rates.
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CDIAC's revamped website, which launches May 1, will offer accessibility to state and local debt from issuance through maturity; and the ability to create summary reports based on search features.
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The Governmental Accounting Standards Board is looking for feedback on disclosure requirements related to infrastructure projects.
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The MSRB is warning investors that the redemption of Build America Bonds under an extraordinary redemption provision could result in losses, especially for those purchased at a premium.
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With billions of federal funding available from the Infrastructure Investment and Jobs Act, one observer says it could be limiting the amount of municipal bonds issued by the sector.
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Teague, most recently an executive director of the municipal securities department at Morgan Stanley, will focus on surface transportation.
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