Public finance

Investors pulled more from municipal bond mutual funds in the final reporting week of 2024, but high-yield reverted to inflows to close out the year, adding to the sector's outperformance overall.

Westchester County, New York, plans to issue roughly $189 million in general obligation bonds, with Fitch Ratings giving the debt its top rating of AAA.

Although a new administration means policy uncertainty, most analysts see the economy growing above trend next year, although inflation will remain a concern.

The court has left in place its decision affirming the bondholders lien on net revenues.

Enviva's bankruptcy is the latest Chapter 11 bankruptcy where green private activity bonds are restructured to near zero.

While municipals have outperformed USTs on the whole in 2024, they will close December with losses. How taxables perform in early 2025 coupled with macroeconomic and Washington policy uncertainty have municipal market participants on edge for what lies ahead.

The muni market saw $507.585 billion of debt issued in 2024, up 31.8% from $385.061 in 2023. This surpasses the previous record of $484.601 billion in 2020 by more than $20 billion, per LSEG data.

Cuyahoga County and Cleveland will each pay $20 million to fund capital repairs at the venues that host Cleveland Cavaliers basketball and Guardians baseball.

The outage began at 5:30 a.m., leaving about 1.3 million of Puerto Rico's 1.4 million customers in the dark, according to Luma Energy, the private company that operates the system. Crews have begun restoring electricity in some areas, but it may take 24 to 48 hours to fully resume service, officials said.

Prolific debt issuance by Texas school districts, state issuers, and others drove muni volume to a state record in 2024, easily surpassing 2023's $59 billion.

Both IG and HY indices will likely end this year richer versus USTs and their benchmarks, "leaving very little cushion to absorb rate volatility," said Barclays strategist Mikhail Foux.

The resolution marks the end of a yearslong lawsuit.

"It's an unfortunate part of doing business," said an investor.

San Francisco's "tepid" recovery from the pandemic was cited by Fitch.

The public finance community remembers President Jimmy Carter's pivotal roles in the near bankruptcy of New York City, deregulation of the transportation industry, and his contributions to state and local governments.

The $33 billion funding gap in the authority's five-year capital plan is too big, the Senate majority leader and Assembly speaker said in a rejection letter.

While Friday's muni session was muted, the damage of a volatile UST market, paired with low new-issue supply and year-end positioning, has weighed on the asset class in December.

A decline in debt service coverage drove S&P's four-notch downgrade for Salinas, California, sewer revenue debt, which it placed on CreditWatch negative.

Kotek has spent the past month working on a very busy agenda involving housing, fires, transportation and construction labor agreements.

High-yield funds saw outflows of $413.6 million compared to the previous week's outflows of $71 million.