Muni Think

Congress is not honoring its Build America Bond promises to state and local governments, even as state and local governments are pledged to make payments to their investors and to rebuild the nation’s infrastructure critical to the future economy, jobs, and competitiveness of the country.

The city of Allen Park in Michigan is demonstrating a potential path for working through municipal financial stress by addressing issues relatively early on and by gaining important support from residents and the banking community.

After the Fed decided not to taper its stimulus program, muni investors may want to grab an airbag, as the market faces likely volatility in interest rates, fund flows, potential issuance and municipal bond relative attractiveness.

Bonds issued by the Commonwealth of Puerto Rico and related entities have experienced dramatic price swings since mid-August, amid shifting expectations about future supply and a growing media spotlight on the island's budget fundamentals.

Many cities and counties are paying substantially more in interest than is warranted by the real risk of their bond issues. How can local governments remedy this situation and thereby achieve better results for their taxpayers? Marc Joffe and Shannon Sohl believe the solution involves greater transparency.

There is undoubtedly considerable waste from inefficient advance refundings, but let's not throw out opportunities to save taxpayers' money, when warranted, by giving credence to half-baked theories based on shoddy scholarship, says Andrew Kalotay.

In the first half of 2013, we continued to observe a trend of increasing annual enforcement activity by the Securities and Exchange Commission, with a pronounced focus on the sufficiency and accuracy of the municipal market disclosures provided by state and local governments.

Over the years, Detroit's financial deterioration and the city's downturn have been well documented, so its bankruptcy filing came as little surprise to most market participants. This point can be reinforced by Interactive Data's analysis below of six different bonds issued by Detroit and related entities, which are representative of the types of debt and structures Detroit has issued.

A recent study of the economics of advance refundings asserts the provocative conclusion that "[t]he widespread practice of advance refundings of municipal bonds is, at best, zero net present value, though wasteful of fees." This study may well compel a counter-study from the many proponents of advance refundings.

Herbert J. Sims' Richard Larkin does not believe that Detroit had to file for Chapter 9 municipal bankruptcy.