Buy side

The sovereign powers and strong general obligation repayment statute supporting Illinois’ investment-grade ratings are being tested by budget gridlock and what one analyst describes as approaching “service level insolvency.”

The SEC wants a Puerto Rico federal court to agree that Jose Ramirez, a former UBS Puerto Rico employee, engaged in a scheme to defraud investors in closed-end funds with large investments in Puerto Rico bonds.

The past 20 years have seen a transformation in the municipal market, marked by technological advances, tougher regulation and an increase in credit quality concerns.

The weekly average yield to maturity of The Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, rose seven basis points to 4.32% in the latest week from 4.25% in the previous week.

Chicago is a standout as the "worst" among its big city peers in key pension system measurements, according to a new S&P Global Ratings pension report.

Former Washington State Treasurer Jim McIntire has joined Star Mountain Capital, a lower middle-market asset management firm, as a strategic advisor serving public pensions and other institutional investors.

OppenheimerFunds will acquire Seattle fund manager SNW Asset Management to expand its high-quality municipal bond offerings.

Alexandra Lebenthal has sold a 49% stake in Lebenthal & Co., an iconic firm in in the municipal market, to South Street Securities.

President Donald Trump’s plan to rely on private prisons to house federal inmates and immigration detainees is reviving interest in the high-yield bonds that financed the lockups.

Investors are mindful of the lessons of Puerto Rico’s financial distress as they chase higher yields and the benefits of interest payments that aren’t taxable by the federal government or by any U.S. state or municipality.

In the week ended March 2, the weekly average yield to maturity of the Bond Buyer Municipal Bond Index fell one basis point to 4.25% from 4.26% in the previous week. The BB40 Index is based on the price of 40 long-term bonds.

Despite the U.S. Attorney General’s reversal of plans to end use of private, for-profit prisons, the bonds used to finance the facilities still bear the risk of abrupt policy changes, according to S&P Global Ratings.

Some analysts see an opportunity in hospital bonds, as the spreads in that sector have continued to widen even as the push to repeal the Affordable Care Act loses steam.

The weekly average yield to maturity of The Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, fell two basis points to 4.26% in the latest week from 4.28% in the previous week.

A change in the credit cycle may be in store for the municipal bond market as the combination of wider-than-average credit spreads and a rising-interest-rate climate threaten to restrain demand for high yield paper.

Public pension funds around the country are reducing their return assumptions.

An attempt by an issuer to introduce protective language into bond documents on a taxable municipal hospital deal backfired and was thwarted by bondholders, Adam Cohen, the founder of Covenant Review, told a meeting of the Fixed Income Analysts Society on Thursday night.

The weekly average yield to maturity of The Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, rose three basis points to 4.28% from 4.25% in the previous week.

Municipal investors at client meetings with BlackRock are expressing more concern about rising interest rates than about the potential impact of tax reform – to the surprise of officials in the firm’s muni group.

Short-term note issuance slipped 1.5% in 2016 as continued austerity among state and local governments and attractive long-term interest rates kept the sector in a downward trend.