Muni Think

Discount bonds performed worse because of the dreaded de minimis rule, under which buyers pay taxes on the gain at maturity at the ordinary income rate when the discount is large. But there is a silver lining — taking a tax-loss can ease the pain.

The Government Finance Officers Association supports regulating those professionals who provide "advice" to state and local governments and believes that the Dodd Frank Act and the Municipal Advisor rule will help to ensure that those who provide advice have a fiduciary duty to their government clients.

It is going to be very difficult for the 2 million Puerto Ricans who do not live in poverty to pay $68 billion of principal, plus tens of billions of interest, plus uncertain amounts of swap termination fees, plus billions of unfunded pension obligations. How was it possible for all this debt to have been accumulated?

During October, Puerto Rico bond prices recouped a portion of their late-summer plunge that pushed yields above 10% for certain bonds. The rebound followed efforts by Commonwealth officials to address the island's wide-ranging fiscal challenges, plus speculation that the federal government might step in to assist Puerto Rico.

Puerto Rico's short term problems are tied to a Greece-like debt trap whereby policies aimed at reducing its fiscal deficit deepen a recession that further widens the deficit, with no end in sight to the vicious cycle.

In the guise of "bringing greater transparency and consistency to the analysis of pension liabilities," Moody's proposed an essentially "one-size-fits-all" approach to pensions that would effectively overstate pension obligations by applying an unreasonably low discount rate, said GFOA's Jeffrey Esser.

The Securities and Exchange Commission's $20,000 penalty on the Greater Wenatchee Regional Events Center Public Facilities District highlights the regulator's heightened focus on the municipal market.

Here is some advice to issuer's counsel regarding their role in bond issues.

In response to a recent commentary on the Securities and Exchange Commission's approval of a final rule defining municipal advisors, SIFMA agrees with Ms. Rodgers Caruso on an important point.

NAIPFA supports the practical, common-sense approach taken by the SEC and its office of municipal securities in writing its final municipal advisor rules, and believes that they will directly benefit the interests of issuers by creating a more robust, fair, competitive and transparent municipal market.