Austin Tobin: the Maestro of Muni Yields

The municipal bond industry earlier this month lost a long-serving advocate for the market, as well as one of its most knowledgeable voices.

Austin J. Tobin Jr., president and founder of Delphis Hanover, a municipal bond research firm based in Southbury, Conn., died on May 9 at the age of 84.

Tobin, a veteran of more than five decades in the municipal bond industry, built and ran Delphis Hanover. Beginning in 1963, the firm provided market data daily about municipal bond pricing and yields until it ceased operations on April 5, after Tobin became ill.

Delphis Hanover also advised muni issuers and financial advisors, helping them determine pre-sale fair-market value pricing levels for negotiated offerings, as well as provide in-depth post-sale documentation.

People in the industry who worked closely with Tobin for decades, even those who hadn’t actually met him, say he was a man of impeccable credibility.

“Austin’s objective voice set a high standard of fairness in price negotiation,” said Dave Abel, longtime friend and director at William Blair & Co. in Chicago. “He believed that fair-market value, through an orderly process, would support the longer-term interests of all parties by helping keep a stable relative market value of an issuer’s bonds.”

Earlier in his muni bond career, Tobin also served as bond counsel for Wood, King and Dawson, and as an underwriter for W.H. Morton & Co.

Tobin was born on May 26, 1927, in Brooklyn, N.Y., the son of Geraldine Farley and Austin J. Tobin, who from 1942 until 1972 served as executive director of the Port of New York Authority, the precursor to the Port Authority of New York and New Jersey.

Austin Tobin Jr. was a veteran of World War II and the Korean War, serving with the Marine Corps. He graduated from Dartmouth College and Columbia Law School.

But his father’s role with the Port of New York Authority helped shape Tobin’s outlook on the importance of public finance, according to Frank Hoadley, capital finance director for the state of Wisconsin.

“His father was more of a builder than a financier,” he said.

Hoadley said he probably talked to Tobin once a week over his 25 years as Wisconsin’s finance director. And he well remembers his conversations with Tobin over steak dinners in New York at a restaurant long since closed named Frank’s, on 14th Street in the Meatpacking District.

“He’s an extremely interesting person, the life he’s lived and the people he’s worked around,” Hoadley said. “He literally and figuratively grew up in the shadow of the World Trade Center. He was extremely well-read and intelligent, and conversant in many different areas.”

Tobin taught Hoadley how to negotiate bond sales. Hoadley learned how to understand the difference between what the underwriter is offering the issuer for a specific maturity and what the issuer thinks it is worth.

“You have to do a little homework ahead of time,” he said. “And if you don’t have those numbers worked out and in mind, you’re going to get lost. You’re not negotiating one single price; you’re negotiating 20 different prices and terms on top of that.”

Tobin also taught Hoadley never to negotiate at the underwriter’s office.

“Your colleagues, your computer, your data, that’s all back here in Madison at your desk,” he said. “It’s much more comfortable negotiating from your own environment than it is in theirs. And if you need to talk to people, or educate people, or need to call on investors, or someone, those are the things you do the week before; you don’t do them while you’re trying to negotiate.”

Tobin provided a price viewpoint to investors and issuers every day in the form of the Delphis range of yields, Hoadley said. And though critics of any particular pricing tool remain ever-present, he added, most found Tobin’s pricing tool very consistent.

Because Tobin produced his price view every business day, there was a long history of it, Hoadley noted. But there was also a record of every bond issue that was sold into the market indexed against the price view.

“You could take a long history for a particular bond issue, bond credit, and look at all of the sales in the past and different markets today,” Hoadley said. “But because it had all been indexed against the range of yields, you could immediately convert that data into: 'all things being equal, this is where it should sell in today’s market.’ ”

John Filan worked with Tobin from the late 1980s through 2006, both as a financial advisor at a consulting firm and as the director of the office of management and budget for the state of Illinois.

He estimated that he spoke to Tobin around 150 times, at length, in a variety of situations.

Filan said he trusted Tobin, even though he never met him in person.

“There was something about him. It wasn’t just what he said, but how he said it,” Filan said. “During a call, Austin would listen to everybody and then give his view. He’d talk about what the alternatives were and what the pricing options were, and what would work, and so on. He just had that tone and reassurance and credibility and gentle authority that you felt good about the decision — many of which stand today.”

Filan said he remembers making significant adjustments to bond issues based on Tobin’s input.

“Back in the ’90s, with one client, the Chicago Park District, we actually pulled the bond issue because we weren’t getting the pricing that we should have,” Filan said. “We were having difficulties with underwriters; they were being resistant. And we went back into the market about two weeks later and got where we wanted to be. Austin was an amazingly informed person, certainly on the municipal bond market, but also on life and the world, in general.”

Tom Glaser first worked with Tobin while serving as the chief financial officer for Cook County, Ill., from September 1995 through November 2006.

Tobin also worked with Glaser in his current role as vice president of administrative affairs at the College of DuPage in Glen Ellyn, Ill.

In his years working outside the spotlights and headlines, Tobin quietly saved taxpayers in Cook County millions of dollars, Glaser said, by holding underwriters accountable to the market.

“There are few people, if any, that I trust more in the municipal bond field than Austin,” he said. “And the advice he gave was always what was best for the issuer.”

Municipal bonds were indeed Tobin’s life, according to his wife, Nancy Becklean Tobin. But they weren’t his only passions.

He also loved reading, specifically the New Yorker and the New York Review of Books. And Tobin enjoyed nonfiction, such as Robert Caro’s books on Lyndon Johnson, as well as writers such as Annie Proulx and short stories.

“ 'Sweet Dreams’ was the last story I read to him,” she said, “the last story that he ever heard.”

A private memorial service will be held between noon and 4 p.m. on June 3 at the Heritage Hotel in Southbury, Conn.

Tobin is survived by his wife, Nancy Becklean Tobin; his children with his former wife, Elizabeth Stephens Tobin, Austin 3d and wife Rita, Farley and husband Alton Parks, John and former wife Nancy Feinberg; grandchildren Jacob, Austin 4th, Nina and sister, Stacy Carmichael, as well as by his stepchildren, Jennifer Conn Bonnar, Richard, Elizabeth and Robert Conn.


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