Muni Think

As an industry, we must speak persuasively with one voice and impress upon the administration and Congress that there is no substitute for the golden, reliable friends of our industry’s past.

One of the shortcomings of the environmental, social and governance discussion is that investors put talk before action. New York provides an opportunity to get the sequencing right.

Most significantly, sectors of the municipal market that were stressed prior to the pandemic due to underlying long-term trends will face significant challenges.

School financing still represents a relatively significant proportion of bond issuance. Cynics would say that given the strong market conditions, school paper will sell at tight spreads regardless of all the noise surrounding the sector.

There is a substantial risk of downward pressure on state and local credit quality that is not currently incorporated in municipal bond market ratings or valuations.

A Fed takeover of municipal lending is a weighty policy decision fraught with dangers that should not be inadvertently or capriciously back-doored into existence during a pandemic.

Especially helpful is the MSRB’s weekly report aggregating disclosures made to the EMMA website that describe the impact of COVID-19 on state and local governments’ financial condition and operating status.

There is absolutely no good reason why, 10 years after Dodd-Frank was enacted, the MSRB has not rationalized its fee structure.

Spoiler alert: Not much. What makes a May Friday a relative oddity is that it was just the first time in 2020 the 30-year UST ended the day unchanged, the second longest span of continuous yield activity since the U.S. government began benchmarking maturities in the late 1970s.

What if there was a debt structure that essentially "refunded" on autopilot, and without transaction cost? Well, the ratchet bond does exactly that.