Refunding bonds

Several strategists estimate the municipal market will be 50% taxable in five years if a direct-pay bond option makes its way into law.

Ridership on the RTA's three service boards remains sharply below pre-pandemic levels but it benefits from coronavirus relief and stellar sales tax performance.

Market participants welcomed the municipal-related provisions in the reconciliation bill but are hesitant to start making bets on its passage.

The Kentucky Public Transportation Infrastructure Authority and the Kentucky Turnpike Authority plan refunding revenue bond sales this month.

The nearly 40% year-over-year decrease is a result of various factors including rising interest rates, other financing tools, such as forward delivery bonds, and simply that refundings are in less demand from issuers.

The absence of advance refunding and a direct-pay bond program in the bipartisan infrastructure package has lobbyists pushing for inclusion of those things in the reconciliation bill, a matter only weeks away.

The authority succeeded in selling unrated bonds to take out CCC-rated bonds.

Another replacement for exempt advance refundings, forward delivery bonds are attractive to issuers looking for savings and investors seeking incremental yield.

The $1.4 billion seaport revenue refunding bond deal Wells Fargo will price next week will be the largest port transaction since the COVID-19 pandemic began.

Treasury has already halted the sale of state and local securities, known as SLGS.

The two issuances under IRS scrutiny join an earlier debt issuance the county disclosed publicly late last year.

Whether a BABs-like program could make it into actual law in Washington is still highly uncertain. What is certain: Some form of infrastructure spending is must-pass legislation because federal-aid highway funding is set to expire in October.

Wednesday will be the first Senate vote on advancing a bipartisan infrastructure deal.

Issuers should recognize their ability to prepay debt is an extremely important term, and they should consult with their MAs to achieve the most liberal prepayment term consistent with the type of financing they are doing.

While June was lower than 2020 in par, pandemic-related factors skewed last year's issuance totals, making the $42 billion issued this month high on a historical basis. Outside factors, such as federal aid and potential infrastructure plans, may affect issuance going forward.

The authority will scoop-and-toss some near-term debt to avoid a shortfall that would force Chicago to dig into its own pockets to cover a hotel tax shortfall.

U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley described the proposal as “a good faith offer and a significant step in the right direction.”

Reinstatement of tax-exempt advance refunding bonds appears to have the broadest support because of its nearly universal impact on state and local issuers as well as nonprofits.

Rep. Richard Neal, D-Mass., the committee chairman, also called for reviving direct-pay Build America Bonds.

The American Infrastructure Bonds Act of 2021 would create a new series of direct-pay bonds that, unlike BABs, would be exempt from federal budget sequester cuts.