Muni Think

Despite predictions of increased municipal bond defaults, it is unlikely that filings under Chapter 9 of the United States Bankruptcy Code, which provides for the adjustment of a municipality's debts, will increase significantly.

Long-time bond attorney George B. Boyle died Aug. 14 in Pittsboro, N.C. He was 81.

I strongly believe it's time for all muni financial advisers to operate under the same set of stringent rules that have long-applied to registered broker-dealers who are also FAs.

It's no surprise that as more and more municipalities are dealing with the need to restructure their obligations, they are looking for a template for a Chapter 9 filing. And many are hoping that the highly publicized restructuring plan of Vallejo, Calif., will prove to be just that template.

In the April 13 story “Wisconsin Conduit on the March” by Yvette Shields, one could get the impression that the Wisconsin Public Finance Authority is a governmental entity created in that state because California wouldn’t do it and that the real beneficiaries are the trade association sponsors and private business interests, not any government.

Sources cited in the Bond Buyer’s March 10 article, “Interesting Times for BDA’s Boss,” make a a number of critical errors and misrepresentations in their references to CUSIP Global Services.

The Bond Dealers of America believes strongly in the health of the municipal bond market. The BDA is concerned about the detrimental effect on municipal finance of exaggerated statements about state and local fiscal problems. As the trade association representing securities dealers and banks active in the U.S. capital markets, the BDA believes it is important to set the record straight.

The BDA and its members will do everything we can to correct misperceptions and misstatements about the municipal market and to provide accurate information to the public about this critical financial sector.

The economic crisis is not over, but Congress is on the brink of allowing important bond programs to expire at the end of the year. That would be a terrible mistake.

Two years ago, I was on the phone with Tom, my regional underwriter, inquiring on the closing date of a standard bank-qualified general obligation school bond issue when I was informed that they could not find purchasers in the late 2008 market environment.