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.
Rating upgrades overlook rural and secondary markets with high unemployment and aging demographics that will continue to challenge hospitals in those markets.
Recent MCDC settlements provide guidance concerning the scope of materiality in continuing disclosure obligations.
As many communities struggle, the capital necessary for investment may be hidden in plain sight with community development finance institutions.
This week we explore the challenges often faced by Issuers and Underwriters in navigating the municipal bond disclosure regime. We also take an early look at the impact of the reopening of the SLGS window.
The SEC recently approved a new set of rules that would likely alter the behavior of one of the municipal bond markets largest, and one of the most influential, investor segments of the industry mutual funds. Surprisingly, the industry appears not to be considering its full implications outside of a few closed circles.
Rhode Island and Michigan top the list of most improved States over the last year. Notable underperformers from the bottom ten are New Jersey, Pennsylvania, and Virginia.
The Administration has concluded that, as part of a comprehensive approach to Puerto Rico's crisis, a tested federal bankruptcy regime is necessary.
Data released last week show continued solid performance from the strongest States, but perhaps more importantly, signs of strength in some of the weakest States.
The $3.6 trillion municipal bond market may benefit from the infrastructure moves if states, agencies, and localities choose to borrow against the new revenue to provide immediate infusions of construction cash.
The proposed legislation doesnt radically alter Michigan law for the benefit of bondholders.
The strong performance of the New York Mets this season, which resulted in their appearance in the National League Championship Series this week, may also help the teams bonds.
School districts in Michigan have suffered enrollment declines tied to aging demographics and competition from neighboring public schools and charter schools.
The local property tax exemption for non-profit institutions has come under attack in recent years, as municipalities, coping with diminishing tax bases, have sought new sources of revenue to bolster their treasuries.
This week we update a comparison of economic strength and fiscal health for New York State Counties, we look at the impact of MCDC on the number of 15c2-12 filings, and highlight one piece of good news for Puerto Rico.
In muni underwriting understanding who is obligated to make required disclosures and the content and timing of required disclosures are critically important.
Of the 18 states with increasing poverty rates, all but three experienced increases in median household income.
The choice to pay or not pay debt secured by a statutory lien when bankruptcy commences is entirely in the control of the municipal debtor.
The challenge of pension promises and bond indebtedness is inextricably entwined.
Some of the past years decline might have been caused by a stronger dollar reducing demand for U.S. products, but the main factor is likely lower energy and commodity prices.
Misinformation abounds as states move to protect general obligation debt with statutory liens.
Rhode Island and Michigan showed solid improvement in labor markets in August, while Puerto Rico showed greater improvement in its unemployment rate than any of the 50 States, according to our proprietary measure of state economic health.
A budget compromise this year to reduce sequester cuts seems unlikely, and agencies like the Defense Department have fewer opportunities to reduce the impact of spending cuts.
While there are currently many reasons for municipal bond investors to fret, one measure of market sentiment is showing a high level of complacency.
Kentucky's economy has shown the largest year-over-year improvement in our economic health score, helped by a strong labor market. High foreclosure rates and lagging housing prices have dragged New Jersey to the biggest decline.
Bankruptcies in Detroit, Jefferson County, Ala., and three California cities helped spawn a new breed of activist judges, who may use Chapter 9 cases as the platform not just for reorganizing municipal debt, but also for helping set the stage for turning distressed cities around.
Beneath the surface of last week's data, which showed the number of initial claims for unemployment insurance was the lowest since 1973, are some dramatic changes, especially in energy producing states.
Food stamp participation is losing value as a poverty indicator amid the expansion of Medicaid under the Affordable Care Act.
This week we look at trends in the DIVER Geo Score for the northeast United States and drill down into New England with a focus on New Hampshire and Vermont.
Amid a tough summer for municipal credits, the Supreme Court decision in favor of subsidies in the Affordable Care Act was good news for the health care sector.
Connecticut's economy has been improving over the past year, while New Jersey's has worsened, according to Diver Geo Scores. Meanwhile a change in Puerto Rico's economic activity index shows a better economy.
Orrick, Herrington & Sutcliffe LLP attorneys take a look at the Securities and Exchange Commission settlements with 36 municipal securities underwriters pursuant to the Municipalities Continuing Disclosure Cooperation initiative.
State Economic Indexes recently released by the Federal Reserve Bank of Philadelphia show the difference between the worst performer and the best performer was more than a full percentage point.
In penalizing corporate wrongdoers with fines, the justice system is missing a crucial component of what criminal law is supposed to be about. Criminal law is supposed to address wrongs against society.
Modern transportation infrastructure is a critical building block to ensure that the US economy is in a position for long term growth and prosperity.
Oxford University professor Brent Flyvbjerg has concluded that about 90% of megaprojects do not meet expectations of costs or benefits, a phenomenon he describes as the megaproject paradox. His research has lessons for municipal investors.
State and private universities, local and state government agencies, and even the federal government have announced significant data breaches that compromised information and caused significant operational disruptions.
A new and better way to design financing plans that is faster, more transparent, robust and reliable.
Discount municipal bonds are much more sensitive to interest rates than reported by standard analytics systems. Investors who rely on these analytics will be in for an unpleasant surprise when rates rise.