Kentucky

Campbellsville University "shares many of the characteristics of schools that are struggling" in higher education, said Lisa Washburn of Municipal Market Analytics.

State revenues were down 0.7% in the first six months of the fiscal year compared to a year earlier.

C. Christopher Trower was the lead attorney before the Supreme Court in a case that upheld states' rights to preferential tax treatment of their own bonds.

Moody's cited prospects for reduced operating deficits, generally stable enrollment and strong philanthropic support.

The ratings agency cited low days cash on hand and operating losses at the system, which operates one of the leading academic medical centers in Kentucky.

The state's government now expects general fund revenues to decline 2.3% in the current fiscal year from the previous fiscal year.

The state is expected to pursue a TIFIA loan instead of toll revenue bonds.

The deal is the second large bond issued from the Public Energy Authority of Kentucky this year.

Southeast state governments are among the most dependent on federal Medicaid, SNAP and FEMA funding.

Moody's based this downgrade on the lowering of the rating of the United States government.

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.