Public finance

Munis "continued their slide" last week as yields rose an average of 23 basis points across the curve as the Fed Chairman Jerome Powell signaled the Fed will take a "more cautious approach" on interest rate cuts next year, said Jason Wong, vice president of municipals at AmeriVet Securities.

S&P Global Ratings downgraded San Francisco's debt a notch to AA-plus from AAA citing weakened economic trends and deficit spending. Moody's Ratings lowered it's rating a notch to Aa1 in October.

The ratings agency cited strong and growing activity and favorable economic trends in the region.

Moody's upgraded Minneapolis to Aaa. The outlook is stable, reflecting an expectation that a strong financial profile will help absorb cost pressures.

The Chicago Board of Education unanimously approved the firing of Chicago Public Schools CEO Pedro Martinez late Friday during a heated special meeting.

The budgeting constraints transformed the state's finances and bond ratings. But critics say the policy's downsides include the stifling of needed investments. 

Municipals are seeing losses of 1.82% in December, which has dragged down overall gains to just 0.68% for 2024, per the Bloomberg Municipal Index.

Silver Point says it has done nothing wrong, and has retained prominent legal figures for its defense.

The San Diego County-based hospital system's financial woes were dire enough to earn junk ratings from Fitch Ratings, Moody's Ratings and S&P Global Ratings earlier this year. Fitch further downgraded the already junk ratings on Wednesday.

"Munis are grappling with a storm of uncertainty," said James Pruskowski, chief investment officer at 16Rock Asset Management.

Moody's cited heavy reliance on reserves, potential for continued operating deficts, and a fall 2024 decline in enrollment as factors in the downgrade.

The central Texas city of Clyde said it issued tax and revenue anticipation notes with a 9.5% interest rate to repay its insurers after an Aug. 1 bond default.

It's hard enough convincing local governments to spend money on cyber insurance that covers ransomware attacks, said Omid Rahmani, public finance cybersecurity lead at Fitch Ratings. The new and very specific threat of a hacked financing process, is "absolutely" underappreciated by the public finance industry.

As the market prepares for 2025, there's a lot of uncertainty around what the new administration will mean for the macroeconomic environment and interest rates, the latter of which may be impacted by policy around the deficit, said Steve Shutz, portfolio manager and director of tax-exempt fixed income at Brown Advisory.

Robert McDermott has joined the firm as a director.

Despite the approval, hurdles remain, including the team's request for more money from the government, which they say delayed approval of the bonds, leading to additional construction costs.

The NFMA has floated best disclosure practices for public power agencies that ask for more data on climate and resiliency goals.

A spike in inflationary costs means a tough road ahead for Washington lawmakers as they take up the budget in the new year.

Ohio legislators plan to vote Wednesday on a resolution that would put a $2.5 billion general obligation bond measure on statewide ballots May 6.

Analysts warn the many one-time measures in the budget Mayor Brandon Johnson narrowly got through City Council will make the 2026 budget even harder.