Tax reform

The new temporary spending bill includes Medicaid funding for Puerto Rico.

The long holiday weekend comes at a perfect time for tired muni market participants after a furious few weeks of action spurred by tax reform.

The muni primary market ground to a halt after a barrage of deals triggered by tax legislation.

The urgency for healthcare issuers to sell tax-exempt bonds is gone after private activity bonds survived tax reform.

The muni market is skidding to a halt from a break-neck issuance filled two weeks, as an eerie quiet pervades ahead of the long holiday weekend.

The two largest deals of the week touched down, as yields rose with comprehensive tax reform just a few President Trump pen strokes away from becoming official.

If Trump signs the tax bill this year without a waiver from the PAYGO Act, it would trigger a $136 billion cut in mandatory federal programs, wiping out federal subsidies for Build America Bonds and other direct-pay bonds.

The primary market is still waiting for the last few deals of the week to hit, as both the holiday weekend and tax bill becoming law draw closer.

Bond director Ben Watkins lamented the loss of the refinancing tactic that helped refinance 62% of the state’s debt portfolio.

Only a handful of larger deals remain for pricing in the market on Wednesday, as comprehensive tax reform is imminent.