Not enough has been done to provide municipal issuers, obligated parties and underwriters the clarity sought and needed by the market.
In the past 3½ years, the Securities and Exchange Commission has asserted its enforcement role considerably, in what can fairly be described as a form of direct regulation of issuers.
Tennessee, Florida, Arkansas, and Michigan have shown significant improvement in economic health over the past year, while some stronger states have been underperforming.
What's the appeal of the tax-credit alternative? It guarantees that a holder will receive full value as long as he has a matching tax liability. That's true even if the issuing State is in a financial crisis and can't pay its bondholders.
Municipalities buy insurance to obtain a higher credit rating for a bond issue and a commensurately lower borrowing cost. The savings arise from a lower coupon or, if the coupon is fixed, a higher price. But how can municipalities make sure that bond insurance makes economic sense for them? The answer is to pay close attention to the costs and benefits.
No single individual played a more critical role in defending the authority of cities, counties, and states to issue state and municipal debt.
As we await the final shoe to drop with regard to the SEC's MCDC initiative, the municipal market may be at a turning point in terms of disclosure.
States like Colorado will continue to forego revenue, as well as the opportunity to borrow against that revenue in the bond market, until the cannabis industry gains access to the banking system.
Our legislation would preserve money market funds as a source of liquidity and capital for public the infrastructure needs of our citizens.
The interest rate environment can have a big effect on issuers' debt management programs. Heres how to incorporate interest rates prudently to ensure flexibility and long-term sustainability.
Worst case, to-maturity debt service calculations that ignore the issuer's optional redemption feature lead to flatly wrong calculations for critical items like expected capital cost, refunding savings, and simple, basic principal and interest payments.
Gov. Andrew Cuomos infrastructure proposals set the state up for long-term economic competitiveness.
While the market overall is fragmented, there is some concentration in the trading of the largest obligors.
Because long-term non-callable bonds are virtually non-existent, muni analysts no doubt spend sleepless nights trying to figure out what optionless rates would look like.
Whether the cause of the slowdown is weak personal-income growth, income-tax cuts, or the collapse of oil prices, pressure on governors and legislators to balance their budgets will be intense.
Despite increased issuance, senior living outperformed comparable bonds in 2015, a trend that is likely to continue.
The Internal Revenue Service is changing the wrong regulation as it seeks to curb the perceived abuse that tax-exempt, governmental purpose bonds are being issued for the impermissible benefit of private developers.
This week we identify the best and worst performing states and highlight the recent spike in the SIFMA Municipal Swap Index.
Instead of prefunding other post-employment benefits, states and cities need to focus on scaling down, and ultimately eliminating this unnecessary and unaffordable benefit.
New best-execution regulations fail to call for or help establish what is missing in the fixed income market a consolidated quote feed.
In the Flint, Mich., case, Congress seems to be making clear it will increase its criticism of state and local leaders, but avoid any fiscal or moral responsibility.
Bradley Wendt of Charles River Associates provides market context to the MSRBs 2016 mandate that best execution, a hallmark of the taxable fixed income and equity markets, becomes a staple for retail municipal bond investors.
If the decline in Cook Countys population continues, it will make solutions to Chicagos and Illinoiss fiscal problems more difficult, especially if the decline in population is driven by a desire to escape the tax burden.
After being one of the best performing asset classes last year, municipals have underperformed taxable markets this year.
A New Jersey senators proposal to resolve the Puerto Rican economic crisis sets a dangerous precedent by elevating public pensions over the islands other liabilities and thus undermining the time-honored priority of the general obligation pledge. And with many in the municipal market tiring of the islands narrative and choosing to ignore the storyline, the consequences could be dire.
The Presidential race is approaching the stage when it becomes appropriate to begin thinking about the potential for policy changes that would impact the municipal bond market.
Bank placements will continue to be an attractive capital source for not-for-profit hospitals and other tax exempt entities, though the lower cost of capital comes with certain inherent risks compared with traditional publicly offered bonds.
This is not a normal time in Atlantic City. In fact, our city is at a crossroads of historic proportions.
The latest data underscore the weakness of economies in the oil patch and the continued decline in variable rate trading.
Since 2010, over 64,000 new beds on more than 100 different campuses across the country have been financed, built and are being maintained by the private sector.
To address the lack of clarity of chapter 9 and to root it in municipal realities, attorney David Dubrow of Arent Fox LLP lists the top five critical changes that should be made to protect the capital markets.
Understanding your culture is a priority for the Financial Institution Regulatory Authority. While some doubt FINRA can do this, there are steps your firm can take to demonstrate adherence to rules and regulations that have an impact on the objective "indicators" of FINRA's cultural assessment.
The data affirms that employment in Texas, Oklahoma, Louisiana, North Dakota and Wyoming has been suffering since January, 2015.
Financial information of state and local government debt issuers is of great interest to state residents and taxpayers, not only for how tax dollars and other revenues are used, but how well they are used. The more transparent, the greater confidence citizens may have in their government. The bar for such transparency has just been raised by DebtWatch.
With time fleeting, Congress and the Administration should proceed under the authority granted them under the Territorial and Bankruptcy clauses of the U.S. Constitution.
This week we review the most recent value of the Puerto Rico Economic Activity Index and examine issues related to its value as an indicator.
Municipal bonds associated with high yield corporate issuers are being traded and quoted at prices substantially higher than bonds of similar maturity issued directly by the same corporations.
Most of New York Gov. Andrew Cuomos infrastructure proposals aim to achieve worthy goals, but have some fundamental flaws from a public policy and infrastructure planning perspective.
While lower oil prices are likely to have a stimulative effect on the national economy, we are wary of impacts on the finances of local credits in the Oil Patch.
This week we update our analysis of export volumes. We also take a brief look at the relationship of municipals to Treasuries and its potential impact on supply.
The municipal market is in a dire need of realistic optionless yield curves.
Texas economy is suffering from lower energy prices, according to the latest statistics, while New Jersey faces mounting challenges as absentee Gov. Chris Christie runs for president.
As this year ends, market sentiment, as measured by Municipal Market Data, is more subdued than usual. We can think of a few possible reasons.
Global equity investors and sponsors continue to demonstrate strong interest in investing in U.S. infrastructure, notwithstanding the relatively anemic pipeline.
While the SEC's MCDC Initiative has provided some clarity with regard to materiality and confirmed that the reasonable diligence standard of Rule 15c2-12 applies to both negotiated and competitive deals, no clarity has been offered with regard to the extent of the reasonable diligence obligations of those participating in competitive deals, as co-managers, syndicate members or selling dealers.
The costs of issuing, trading and managing portfolios of tax credit bonds would cause such securities to be unappealing both to issuers and investors.
Underwriters of municipal bonds have an obligation to perform due diligence on the issuer and any other individual or entity that may be required to make payments on the bonds as they come due.
The notion of option-adjusted spread (OAS) is the standard analytical tool for taxable fixed income securities. It is also making inroads into the muni market. Unfortunately the usual implementation for munis is flawed, rendering the results virtually meaningless. So it is understandable that many muni professionals shy away from OAS in favor of the archaic yield-to-worst approach. Correct implementation would undoubtedly attract converts.
The slowing Chinese economy and the strong U.S. dollar have the potential to impact export oriented industries in the U.S.
The second wave of underwriter settlements was similar to the first, but with some new details on issuers failures to comply with prior continuing disclosure undertakings.