Kentucky

The state hopes bonds and associated incentives will help to address a state-wide housing shortage.

A $150 million housing bonds with a taxable component is anticipated for May and $110 million higher education student loan bonds are also anticipated for that month.

The ratings agency cited weaker than expected financial performance in fiscal 2024 and a slow anticipated recovery in coming years.

Moody's cited heavy reliance on reserves, potential for continued operating deficts, and a fall 2024 decline in enrollment as factors in the downgrade.

The agency cited a sustained commitment to healthy reserves and structural balance.

The Investment Company Institute reported more than $1.3 billion of inflows into muni mutual funds. The last time inflows topped $1 billion, per ICI data, was for the week ending Feb. 7. LSEG Lipper has reported weeks with $1 billion plus inflows on July 31 and May 8.

The bonds, expected to be rated Aa2 by Moody's, will will be among the earliest general obligation bonds sold by Kentucky school districts since the state passed a law in April allowing such debt by school districts.

The region's municipal bond volume grew by 42.4%, outpacing the nationwide 32% increase in a first-half marked by gas prepay deals and Brightline's big sale.

"Investor reception will remain the ultimate arbiter of muni performance and … the current state of the tax-exempt space to be well-positioned, even though munis are likely to continue to underperform USTs," said Jeff Lipton, a research analyst and market strategist.

Observers say the problems of KentuckyWired has lessons for all public-private partnerships.