Washington

The elimination of private activity bonds would remove a financing tool that supports many public private partnerships.

While Congress sets its focus on overhauling the nation's tax code, one provision of plans introduced in both the U.S. House and Senate could have unexpected and far-reaching implications for LSU fans.

Tax reform legislation will be front and center this week, snatching the market’s attention as Congress moves ahead with measures that will change the bond marketplace in the near- and long-term. Both the House and Senate are taking up muni proposals that will directly impact issuers, underwriters and bond buyers.

With little slack in the labor market, “inflation is likely to reassert itself at some point, so increasing the fed funds target rate “makes sense,” Federal Reserve Bank of Philadelphia President Patrick Harker said Sunday.

The municipal market will get another healthy dose of issuance in the final full week before Thanksgiving. The calendar is chock full of deals from Illinois, as all issuers look to price bonds before the tax laws change.

The 20% corporate tax rate also would have an adverse impact on the muni market.

While some buy side analysts see a supply “nightmare” following the tax reform proposal, others are looking for opportunities to "stock up" on munis.

Several big names in the muni market will be part of a new SEC committee

The muni market would fare better in the Senate Republicans' tax reform proposal, which would preserve private activity bonds and enhance them through the repeal of the alternative minimum tax. However, advance refundings and the SALT deduction would be terminated, a "one-two punch" for state and local governments.

The Illinois Finance Authority authorized a passel of deals that would be outlawed by a GOP tax bill.