Transcription:
Mike Scarchilli (00:04):
Hi everyone and welcome to the Bond Buyer podcast, your trusted source for insights on all things public finance. I'm Mike Scarchilli, editor in chief of the Bond Buyer, and in this episode we're joined by Jeanette Weldon, executive director of the Connecticut Health and Educational Facilities Authority. Anna Elaine Brennan, president and executive director of the Public Finance Department at Roosevelt and Cross this year's recipients of the prestigious Frida Johnson Award presented by the Northeast Women in Public Finance at the Bomb Buyers Deal of the Year Awards December 2nd in New York City. The Frida Johnson Award recognizes trailblazing women who have made distinguished contributions to public finance while mentoring the next generation of leaders in conversation with Lynn Funk, the bomb buyer's, senior director of strategy and content for live media. Jeanette and Elaine reflect on the evolving challenges and opportunities facing the muni market, the changing dynamics of work and mentorship in a post pandemic world, and how the public finance community can continue to grow more inclusive, impactful, and resilient. Let's get into it.
Lynne Funk (01:15):
Welcome everyone to this Bond Buyer podcast. We are so delighted to welcome Jeanette Weldon and Elaine Brennan, the 2025 Freda Johnson Award winners. Welcome so much to you both and congratulations on this much deserved honor.
Jeanette Weldon (01:31):
Thank you.
Elaine Brennan (01:33):
Thank you so much, Lynne.
Lynne Funk (01:35):
Excellent. Well, this has become a tradition here at the Bond Buyer to interview, do a podcast with our Freda Johnson award winners, and I'm really excited to talk to both of you, but let's get into it. So when we're looking at 2025, the muni market has fared quite well amid some pretty major macroeconomic and policy uncertainty. And I know as we're recording this on the 19th of November, I believe we've already broken last year's issuance record. So let's talk about the market from your seats. What's your sense of it heading into year end and into 2026, maybe some challenges and opportunities. And Elaine, would you kick us off here?
Elaine Brennan (02:19):
Thank you, Lynne. Yes, we do have seen varying degrees of volatility in the market over the years. Sometimes we have a pretty flat market. Past few years have been more challenging than some others. This year we've had the problems with the uncertainty with tariffs and their impact on the economy, on the markets and on employment, and we've seen a lot of major ups and downs over that. Also, our recent record government shutdown has been difficult to meddle through with no economic data. It's hard to follow along what the Fed will do as they really have no benchmarks by which to set policy direction. Now we've come to an agreement on that and we're starting to see economic data being released. However, we could be potentially having another shutdown at the end of January. So that's always looming. We didn't have as much of a threat this year as last year as the concern about loss of tax exemption.
(03:16):
That's always a possibility, especially as our deficit grows dramatically. But it looks like for this year anyway, it's not as much of a concern. It's still always on the table, maybe toward the back burner rather than the front burner. But we do appreciate and work with our lobbying groups to help us ensure that that's an option for issuers because it's a big concern in our market, of course go up because of losing that. As far as opportunities in the market, I think we will see 2026 volume be close to if not surpassed 2025. In my opinion. It's a little early to predict at this point, but there's a few reasons why we may see an uptick in issuance. One is the opportunity for debt service savings through fundings. It's likely to be a little better in 26 than it was in 25, still nowhere near what was four or five years ago. We are seeing some softening, some easing to fed policy, which incrementally brings rates down, although slowly but the lower even incrementally lowered rates by a quarter a point or so can really help issue is move forward with capital projects as the debt service payments become more affordable for them in their budgeting process. I do see the possibility of greater dependence on state and local governments for these infrastructure projects and financing needs. So that's both a challenge and an opportunity I think for the muni markets. That's my take.
Lynne Funk (04:51):
Thank you very much for that. Jeanette, you are sitting in the issuer seat. Do you want to give us some highlights from your perspectives?
Jeanette Weldon (05:00):
Yes, absolutely. So my focus is really from a credit quality perspective. So CHEFA is an issuer on behalf of 501(c)(3) nonprofits in Connecticut and the bulk of our borrowers are actually higher education institutions and healthcare organizations. So higher ed, there's been a lot of publicity about the various headwinds that that industry is facing. Enrollment uncertainty changes to federal funding of higher education through the elimination of certain loan programs like Grad Plus and changes to other undergraduate loan programs. And then also schools are seeing some declines in international student enrollment just given the current political climate. And so actually those are trends that can affect not only our 501(c)(3) borrowers who are higher education, but also it can affect our CHEMA, which is our student loan subsidiary that issues bonds to fund education loans. And so it creates challenges for the schools that we're trying to support through that program.
(06:16):
On the healthcare side, I think there's also plenty out there about the payment challenges that providers are facing, whether it's from insurers or governmental payers. The affordability of insurance coverage or the lack of affordability could actually lead to more uninsured patients, which again will be a challenge for those providers. And then I think current trends of artificial intelligence, which will impact the nature of healthcare delivery and aging population, workforce challenges, all of those things play into the credit quality of hospitals. So I think in response to some of these challenges on both the higher ed and the healthcare side, you'll see more collaborations, partnerships, efforts to lower costs perhaps through the use of AI tools, but I think that those will be part of the focus for trying to maintain credit quality in the face of these challenges.
Lynne Funk (07:28):
That's so helpful. I think it's from both of your perspectives, you really laid out there some of these pretty major challenges the industry faces. And maybe I'll turn it back to Elaine for a second. To go back to that comment you made that you think there is opportunity for state local governments to take on some of these, essentially to fund more of the infrastructure and the programs that are going to be needed as a result of the federal pullback. I guess the real question is how do we see state and local governments playing that role in moving ahead financing infrastructure given these headwinds? Can the muni market fill the void?
Elaine Brennan (08:13):
Yes, Lynne. I think that the muni market is set well to fill the void. I think we have a broad base of investors and we have good inflows over the past several months anyway. And as long as we have a tax advantage where a municipal product may be a better buy or a better investment than other products out there and it's priced right, I think we'll see the volume and we can see the funds flow into our market. And it's great that the muni market as a buy side I think can adapt to that. It is a bit of a challenge for some issuers. I think there are some states and local governments that have a much greater capacity or ability to plug some of these holes that the federal government programs cuts may create some of the larger entities, some of the entities that have a more overview and a more sensitive of wanting to keep up with infrastructure as well as products that would care for the health and wellbeing of their constituents, affordable housing, clean water, clean air.
(09:27):
So some local governments are set up to better manage that as well as are financially more capable of managing that. So that's a challenge for some of these other governments that might not quite be there in terms of having the foresight to plan ahead for that or having the funds or even the taxing base that can afford to take on board debt to maintain the quality of life for the constituents in the long run. It's pretty common knowledge that our infrastructure needs in this country are great. And whether it's adding new construction, new housing, clean water, clean air, cost efficient energy, all these needs are great roads, buildings, bridges and new construction plus updating existing construction. It has to be paid for. And we know those needs are great. So whether it's at the federal level and state level or local level or some combination thereof, it needs to get done. We just hope that all of the entities across the United States can work with the federal government and fill their needs because as I said, it's easier for some entities to do that than others. So that's a concern of mine anyway.
Jeanette Weldon (10:44):
And I think we can also view infrastructure more broadly to include human infrastructure. So from my perspective, state governments might have to step up to help fund higher education given some of the cuts that have been made to student financing supports and loan programs. And I think from the state's perspective, it's also benefiting them because it's improving workforce development opportunities. And so I think state-based nonprofit lenders like Chela can contribute to that, but they can't be the sole solution because the needs of those student borrowers are great and they're really across the credit spectrum. So I think it really needs to be a combination of state-based student lenders who can issue some bonds in the public debt markets, augmented with funding from the state to support additional initiatives.
Elaine Brennan (11:49):
I just agree completely, Jeanette. Sometimes the federal cuts we see, maybe they're aimed to get a better balanced budget, but sometimes if they're not done properly cuts can hurt the people that need the most help. And that's something we all have to be concerned about and follow.
Lynne Funk (12:07):
That brings an interesting question from my mind, and clearly issuers, state and local governments, all these constituencies need as many tools in the toolbox as possible. So I'm kind of curious, and maybe Jeanette, you have some thoughts on this in terms of private capital or p threes, things of that nature, alternative investors in the muni space, taxable bonds. I wonder how much of a role they might play in the future to fill some of that void.
Jeanette Weldon (12:40):
Yeah, I think as far as CHELA as a state-based lender, issuing bonds is concerned, taxable bonds are becoming, we have not relied on them heavily in the past, although there are other state-based lenders who have. But I think going forward as we're trying to find ways to fill this void left by the elimination of grad plus loans at the federal level, we are going to be going into the taxable market because we are otherwise limited by private activity bond cap in terms of how much we can issue on a tax exempt basis. And so that's something that we feel has become a hindrance to be limited by that bond cap. And it would really be helpful, particularly as we're having to step up to provide more support for these student borrowers if we could have greater access to tax exempt bond funding because that's just going to ultimately lower the borrowing costs for those students.
Lynne Funk (13:49):
Right. And I think it's interesting when Elaine, you brought up the tax exemption and the fight to preserve it this year and how much of a concerted effort the entire industry made. And I think we all can recognize that it was a good effort because there seems to be some real impetus to keep that momentum going at least. And now we're going to
Lynne Funk (14:11):
Take a quick break and we'll be right back. And now we're back with Jeanette Weldon and Elaine Brennan, the 2025 Freda Johnson Award winners.
Lynne Funk (14:24):
Well, thank you both so much for those insights there. I do want to pivot over a bit to, part of the reason you're both here with me talking today is that you're Frida Johnson winners and certainly your ability to engage and mentor a younger generation of public finance professionals. I guess I'd start off with the first question, just what have you both learned from perhaps this recent arch of working remotely during COVID to a hybrid environment? How has this changed the dynamic for working with colleagues and younger folks? Jeanette, would you want to kick this off for us?
Jeanette Weldon (15:08):
Surely. So after COVID, we pivoted to a hybrid work environment. So during COVID we were a hundred percent remote. After COVID, we decided to permanently move to a hybrid approach. So not just as a transition, but as the way that Chifa was going to operate going forward. And so it took a little bit of getting used to for the staff because everyone had gotten quite comfortable with we're a hundred percent remote and it had certainly had its conveniences. But I think the staff, after we got through that transition period, and I think the staff overall and the younger staff in particular have valued the opportunity for in-person interaction and collaboration that the hybrid model presents. So it's really, I think, enhanced our ability to build the culture, maintain the culture, create peer to peer connections. And so for example, we have a staff led committee that plans after work events and get togethers.
(16:29):
And so I think that's a good example of just how the staff is eager to spend time together in person and we set it up so that all staff have to be in the office at the same time once a week. So that's on Tuesdays. And that gives the opportunity for key meetings or HR types of discussions that you want to have face-to-face or just talking about goals or performance. We're able to do that so that you can maintain these constant connections. So I think it's worked out well and I'm very pleased with the approach that we've taken.
Lynne Funk (17:15):
Elaine, what are your thoughts
Lynne Funk (17:16):
On that?
Elaine Brennan (17:17):
Yes, thank you. I think Jeanette's approach, an excellent approach. I have a much different experience, probably a very atypical experience. My company never went completely remote. We were in the office, I'd say starting off at the onset, about a third of the employees came in very carefully, socially distanced. We have a fairly large space for the size of our firm in our New York City office, I guess hurricane disaster type office that has a two person office that could probably fit triple, quadruple that in Warren, New Jersey. So I would say very soon after the onset we were probably back half staff and gradually we got back to a hundred percent. Now that doesn't mean to say that we don't allow people to work remotely when they choose to when they need to. We don't have a set policy. It's much easier at a firm the size of hours.
(18:26):
We only have 35 employees, and that includes our upstate New York branch, our Connecticut office, and our island office. So we're in New York City today. We have 26 to seven full-time employees. We have one person that never came back. She's probably close to retirement. I think next year she'll retired, but she was with a company in a long time in the operations department. She could perfectly handle her functions without ever coming back in. She comes in a few times a year to help cover vacations. So that's fine. I think, as I said, being in a small company, it's very easy for us to do this on an individual case by case basis. There are some people that pretty much have to come in all the time. The core of our operations department, our underwriting team is always here. The Salesforce in general is here at least four days a week when we have underwritings.
(19:18):
So I think it's dependent on your job function. I also think it's dependent on your level of experience and other factors. If you come in and don't know the ropes of our internal workings, you have to at least work in the office right away for the first several months until we can determine that you can work effectively remotely. So each department has to assess carefully. For instance, as a banker, I am here most days, but if I do want to work remotely, I can. A lot of the work I do is document work and on emails and reviewing documents and being on conference calls. Sometimes I'm on calls all day long, so I don't need to be in here to do that. But if I have a pricing, that's one of my deals. Of course, I come in, I like to be there to watch the sales effort.
(20:08):
And also as a manager of the firm, there are day-to-day problems that come to mind that come to light without much notice. So it's really important that we have at least a couple of members of the board in the office every day. So I guess the bottom line is I think it's really important to encourage people to come in person, but I also think they need to have the flexibility to attract and keep talent, whether it's somebody right out of college or someone that's been with the company for 25 years. I think as long as employees are effective, it's a good tool to have for a company to employ, to promote their satisfaction, their wellbeing, their mental health, their physical health, and their life balance. So again, larger companies must or probably need to much more habits set maximum days in the office, two days, three days or times of the year. And we're a little more flexible. But again, I think we probably have most people in the office almost every day, which is probably a little unusual, but it seems to work. I
Lynne Funk (21:17):
Think that might be a testament almost to the industry itself. Kind of what I wanted to ask you both is as I'm closing up the 2025 calendar of Bond Buyer events we had in California public finance, we had a whole panel on the future of public finance and talking about how do we get the younger generation into the industry and then to stay in the industry, particularly when you're competing with such a, I'll use the terms or whatever, flashier, sexier parts of finance, how do you both communicate with the younger generation to keep them engaged and in this space? So I
Jeanette Weldon (22:08):
Think to me, the appeal of the public finance space is really, in my mind, it's kind of like the best of both worlds because you have the challenge of working on complex financings or how can you solve a particular financing problem for a client, but at the same time, the things you're working on once they're completed can have some real societal impact, particularly for members of the population that might not otherwise have resources or opportunities. So for me, being able to do things like work on a transaction for a children's hospital to build a new tower, and then a couple of years later being able to drive past that tower and feel like I had something to do with it, it gives me a great sense of pride and satisfaction that I was able to play some sort of small part. So to me, that's a big appeal of public finance. You can sort of feel like you're helping others, so to speak in an indirect way, but you're still also challenging yourself and doing very interesting work.
Elaine Brennan (23:48):
Interesting. I had a similar experience of Jeanette did last year we were involved or lead manager on a transaction building a new school in one of the five cities in New York other than New York City, and we would be on weekly or biweekly calls, and toward the end of the financing before it came to market, we had calls where the camera was actually on the building and we were all speaking to each other. We had the underwriter on the call, we had the financial advisor on the call, we had the city, we had the builders, the architects. It was a very large group, but while we were speaking, we were watching the workers putting windows in the building or putting girders in. It was very exciting. So I agree with that. I think that's a very rewarding part of our careers, and I think we can keep encouraging people along those lines to doing that.
(24:49):
And some of the ways you can do it is by, again, mentoring professional organizations, bringing new people in college outreach programs as what we talked about the last topic, providing a work-life balance for young people. And another thing I think is good when someone enters public finance initially in our field is no matter what role they have, is to encourage them to learn as much as they can about all the other roles. I'm not going to ever be an architect, but I find that just so interesting and challenging to hear what goes into their job to build this building. I'm never going to go to law school, but I love learning from the bond councils on transaction, what they need to complete to get the transaction approved and closed. And so I think it's really exciting and fun to learn what makes the whole bond deal tick from the issuer side, the banker side, the advisor side, the lawyer side, and even the builders and the architects and the approvals side. So I think that will encourage people to stay in our field because it's rewarding and it's interesting.
Jeanette Weldon (26:07):
And I think some of what you just articulated, Elaine ties directly to some of the activities that Northeast women in public finance engages in. And so college outreach or programming that's going to attract across the spectrum of where people are in their careers and the mentoring program obviously. And one of the other things that I think is very telling about how nice it is to be in public finance is the fact that people stay in this business a really long time. Yes, we do. So it's actually amazing the tenure of people within public finance, but it does sort of set the stage for a lot of interaction between those who've been around quite a while and those who are just entering. So even when it's an informal networking settings, I think it sends a message to those entering the industry that it's a good place to be.
Lynne Funk (27:27):
I think it's interesting, Jeanette, you mentioned AI, which in terms of helping certain sectors and industries improve and we could do millions of podcasts on AI, but we're not going to do that. But I like to point out then kind of to tie a bow on it is I think this industry, the human element is still so key to making this industry be as successful as it is, the connections, knowing the networking, the talking to one another, meeting in person. So at least I think that's really from 2026 or 2025 takeaways for me is that that's really an important part of this, telling the muni story not just to people internally, but externally.
Jeanette Weldon (28:14):
Agreed.
Lynne Funk (28:15):
Great. So I guess I think this is probably, I'd be remiss not to ask you about, you are both leaders, women leaders in this industry. How's the public finance industry shaping up here? What efforts have we made? Where are we now? What still needs to be done? That's a lot of questions all at once. Who wants to take first cut on that?
Jeanette Weldon (28:39):
Well, I would say to a certain extent, public finance industry is no different than some other industries as far as equity or opportunities for women or opportunities for people of color. Although I do think actually there are probably more opportunities for that type of diversity in public finance than there might be elsewhere. And I think that's probably driven by the fact the origins being working with state and local governments who are more representative and so therefore the bankers and other vendors working with those governments trend towards being more representative. But I do think challenges remain just like any other industry, and I think women in particular need to be aware of that. I think everybody has implicit bias. It's almost a naturally occurring phenomenon when you think of it down to all sorts of different levels. But I think if people try to be mindful of that and just be aware of their own perceptions and assumptions that we can move beyond that in a positive
Elaine Brennan (30:30):
Way.
Lynne Funk (30:31):
Great. Elaine, any thoughts?
Elaine Brennan (30:32):
Yeah, I agree with Jeanette a hundred percent about our field being, I think a little more conducive to equal opportunity just by virtue of the fact that we deal with issuers that are aware of the need for that as opposed to a corporate structure or something. It's interesting because I guess you would call me one of the most to be polite, they call me one of the seasoned professionals because of my longevity in the business. I've been working continuously for the past 50 years. I started in this industry shortly after about four years after I graduated college, but my first close to half of the experience from the industry was on trading on the desk side. A little bit less opportunity then. It's much more now, but a little less opportunity then I think versus the banking side. Even looking back to when I was a trader and I would travel with the bankers, there were more women on the banking field than there were on the trading desk. So it's always been a little better in that sector, but I think it's starting to get much better.
(31:45):
I think there's still a lot we need to do to improve it. I think you look at the opportunities for women, minorities, disabled in our line of ward in our field, and I think the goal is to get everyone there. Where I do see still a bit of a problem is at the top, the underrepresented at the top, whether it be minority or a woman. I think I see a lot of strong leaders in the middle to upper management, but very few at the very, very top. And that's I think something that this whole country needs to improve on, not just in our business, but countrywide in all fields.
Jeanette Weldon (32:30):
Right. I agree with that, Elaine.
Lynne Funk (32:33):
Well, thank you both so much. I wanted to, before we wrap up, is there anything you think that I didn't ask you or you'd want to leave this audience with before we head out?
Jeanette Weldon (32:44):
I guess the only thing I would add is, and this would be more of a message for those early in their careers or just starting out, I think liking what you do is critical to your career success. And if you like what you do, then you want to be creative, you want to develop new ways of doing things, and it's all exciting to you, and that's the foundation for having a long and successful career. That's very satisfying.
Elaine Brennan (33:22):
Absolutely, Jeanette. I agree. And I also think having the support people, when you do run into challenges at work, you could love what you do, but may come across a challenge whether it's a person or another obstacle. And that's what I love about Northeast Women in Public Finance. There's so many opportunities to support either within the groups, mentor to mentor, mentee to mentee, and both, and just networking that we have. It's very special, and I think it's a very healthy organization that does help our industry tremendously. So I'm very happy to be part of it and thankful to be recognized by them.
Jeanette Weldon (34:00):
Yes, I totally agree. Elaine and I feel the same way.
Lynne Funk (34:03):
Jeanette. Elaine, thank you both so, so much for joining me today. I am very much looking forward. We are all looking forward to celebrating you December 2nd at the Bomb Buyer Deal of the Year Awards in New York. So well deserved, and thank you again for your time. We'll see you soon. Thank
Elaine Brennan (34:22):
You. Thank you.
Mike Scarchilli (34:25):
That's a wrap for this episode of the Bond Buyer Podcast. A big thank you to Jeanette Weldon and Elaine Brennan for sharing their insights and to Lynne Funk for leading the conversation. Here are three key takeaways from today's episode. One, as macro uncertainty and federal pullbacks reshape the funding landscape. State and local governments are increasingly stepping up to meet infrastructure and public service needs, creating both opportunity and strain for the muni market. Two, public finance remains uniquely rewarding, offering professionals a career where complex financial work has visible community level impact from new schools and hospitals to clean water and housing. And three, mentorship flexibility and inclusivity are critical to attracting and retaining talent, especially among younger professionals, navigating hybrid work, evolving industry norms, and a desire for purpose-driven careers. Thanks again for listening to the Bond Buyer Podcast. This episode was produced by the Bond Buyer. If you liked what you heard, please subscribe on your favorite podcast platform. Leave us a review and visit us www.bombbuyer.com for more of our award-winning coverage. Until next time, I'm Mike Scarchilli signing off.