Refunding bonds

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.

Reported savings from advance refundings make great headlines, but they come with a concealed opportunity cost: waiting with refunding until the call date is likely to be considerably more beneficial.

The White House and a bipartisan cadre of lawmakers appear committed to getting infrastructure, including top muni market lobbying goals, achieved.

“Our net present value savings were $191.5 million or a record-setting 29%," said North Texas Tollway Authority Chief Financial Officer Horatio Porter.

With federal aid rolling out, the municipal credit picture is improving and issuers are coming to market at a faster clip. An infrastructure package could push issuance levels even higher.

Public finance groups hope that the Biden administration will show the same support for tax-exempt bonds that House Democrats do.

The three-pronged Local Infrastructure Financing Tools Act was introduced Friday by Rep. Terri Sewell, D-Ala.

Forward delivery sales, a replacement for tax-exempt advance refundings, could grow in 2021.

The authority appears ready to take advantage of market conditions following a successful December refunding.

The current prohibition against tax-exempt advance refunding was used as a minor pay-for in the GOP’s Tax Cuts and Jobs Act that cut personal and corporate tax rates.

The first quarter of 2021 concludes with $102.1 billion, slightly higher than the $95.3 billion that the market saw in the COVID-ravaged first quarter of 2020.

The savings from the March 19 bond sale will be dedicated to Guam’s tourism recovery efforts as well as debt service.

The public notice filed on EMMA is the first report by any issuer in calendar 2021 of any type of IRS audit communication.

Planning will require favorable tax policies, sophisticated capital programing, bond financing, and pioneering public-private partnerships. It also requires a cohesive national, bipartisan infrastructure plan as a foundation to begin addressing this impending infrastructure crisis.

Although all of the proposals have some bipartisan support in Congress, the extent of that support remains unclear.

From the use of taxables to forward deliveries, refunding deals drove an overall 15.8% hike in Midwest bond volume that exceeded the national average.