Muni Think

The Commonwealth of Puerto Rico needs another "operation bootstrap" to spur its economy, a veteran municipal analyst says.

Scheduled negative amortization of pension liabilities is very common, can be perpetually increasing and is often unrecognized by many pension stakeholders and municipal market participants.

As protection of the retail and non-sophisticated market participant continues to be a priority for regulators, the new rule, G-47, clarifies obligations previously embedded in interpretive notices and makes clear that the time-of-trade disclosure obligation applies when you “sell a municipal security to a customer, or purchase a municipal security from a customer, whether unsolicited or recommended, and whether in a primary offering or secondary market transaction.”

With much of the angst around the debt ceiling silenced until 2015, Congress is unlikely to focus much on the municipal securities market, which means that the tax-exempt status of municipal debt is unlikely to be threatened in the near term. With that said, regulator cross hairs remained trained on the municipal market.

"One of these things does not belong" is a catchy slogan — and it comes to mind when looking at the latest tax policy ideas coming from Washington when looking at the municipal bond tax exemption. The exemption is not a result of the growth of a tax code designed to induce or reduce certain behaviors. Rather, it is the foundation for the flow of capital in a $3.7 trillion dollar market required to efficiently finance the nation's infrastructure.

Land isn't the only thing drying up in California, as the drought's economic impacts are dangerously closing in on the state's financial resources.

Why is Proposed Rule G-47 pending approval by the Securities and Exchange Commission, and how will it differ from the existing rule? Why is this well-intentioned and, as some believe, needed rule the subject of an SEC order that has delayed its implementation?

The Securities and Exchange Commission used a combination of its antifraud authority and SEC Rule 15c2-12 in 2013 to raise the bar for issuers' secondary municipal market disclosures.

The first critical step in a municipal workout, whether inside or outside of bankruptcy, is to get all parties, the debtor and the creditors, to accept that they will all have to incur significant losses as a result of the workout process.

There is no easy, single answer to explain why Detroit or San Bernardino or Jefferson County and other local governments have resorted to bankruptcy in recent years.