Tax

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.

Breakneck action continued in the primary market as issuers flooded the market ahead of the tax reform vote, in order to get deals closed before the end of the year.

What does the new tax legislation mean for the municipal bond market? Bond Buyer Washington Bureau Chief Lynn Hume and Contributing Editor John Hallacy sort it out. Chip Barnett hosts.

Market experts see less municipal bond volume next year, far fewer bank loans, new buyers of bonds, and more volatility if the tax bill is enacted as expected.

After Puerto Rico failed to persuade Congress to ease the modified territorial tax system in the tax law, an opportunity zone measure helping the island may be included in a January emergency spending bill.