Wayne County, Mich., Executive's request late Wednesday for state intervention may delay the county's $187 million note sale, which was scheduled for as early as Thursday.
Wayne County Executive Warren Evans asked for the state to intervene to help tackle the county's fiscal woes. Evans submitted a formal request that a financial emergency be declared. He made the announcement in a statement, reporting that he had submitted a letter with the request to state Treasurer Nick Khouri. Evans portrayed the request as a step needed to aid in the execution of his proposed recovery plan to rid the county of a $52 million structural deficit.
The announcement came as the county was set to sell $186.7 million of notes as soon as Thursday.
A report published on Thursday said the county has decided to postpone the sale. Crain's Detroit Business reported deputy Treasurer Christa McLellan said the sale was delayed.
The taxable limited-tax general obligation notes were scheduled to be priced by Bank of America Merrill Lynch. S&P assigned an SP1 rating to the deal, citing a "strong capacity to pay principal and interest." The borrowing is one the county makes regularly to cover late property tax collections owed to its local units.
Public Financial Management was municipal advisor and Axe & Ecklund was note counsel. The county also hired Orrick, Herrington & Sutcliffe as special bankruptcy counsel.
Bond documents and an online investor roadshow both contain discussions on bankruptcy in the sections on investor risks, marking the first time the county has formally warned investors of the possibility of bankruptcy.
Primary Market
The N.Y. Metropolitan Transportation Authority is selling $500 million of Series 2015A transportation revenue bond anticipation notes competitively.
The BANs are dated June 25 and due March 1, 2016. The notes are rated MIG1 by Moody's, SP1-plus by S&P and F1 by Fitch.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Thursday was flat at 2.29% from Wednesday, while the yield on the 30-year GO was unchanged at 3.27%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Thursday with the yield on the two-year Treasury note falling to 0.64% from 0.66% on Wednesday, while the 10-year yield rose to 2.33% from 2.31% and the 30-year yield increased to 3.13% from 3.10%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 99.3% versus 98.9% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.5% compared to 106.6%, according to MMD.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $970.8 million, bringing total net assets to $245.11 billion in the period ended June 15, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $1.99 billion to $246.08 billion in the previous week.
The average, seven-day simple yield for the 394 weekly reporting tax-exempt funds remained at 0.01% for a 111th straight week.
The total net assets of the 992 weekly reporting taxable money funds fell $14.99 billion to $2.370 trillion in the period ended June 16, after experiencing an inflow of $6.28 billion to $2.401 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 22nd consecutive week.
Overall, the combined total net assets of the 1,386 weekly reporting money funds decreased $15.96 billion to $2.370 trillion in the period ended June 16, which followed an outflow of $14.12 billion to $2.631 trillion the week before.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 42,809 trades on Wednesday on volume of $10.158 billion. The most active bond, based on the number of trades, was the Turnpike Authority of Kentucky Series 2015 A&B economic development road revenue and revenue refunding bonds for revitalization projects 4s of 2035, which traded 98 times at an average price of 99.525 with an average yield of 4.035%. The bonds were initially priced at 99.589 to yield 4.03%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.59 billion to $10.52 billion on Thursday. The total is comprised of $3.20 billion competitive sales and $7.32 billion of negotiated deals.
