- "We as municipal market participants should really be penalizing in some way, by almost not giving them any access to the market,” says Peter Hays, who oversees $119B as head of municipal bonds at BlackRock.
- He notes Illinois is a state that refuses to pass a budget, and has the lowest funded ratio on their pension of any state.
- The term "bond vigilantes" was invented with regards to investors forcing discipline on national governments, but they've been mostly absent from the $3.7T municipal market, despite a number of notable bankruptcy filings of late, as well as Puerto Rico's issues.
- The lowest-rated U.S. state, Illinois this week announced plans to borrow $550M for capital projects on June 16. For now, investors are demanding an extra 183 basis points to hold Illinois 10-year debt vs. AAA munis. Still the yield is just 3.42% - that's 20 basis points lower than four years ago, when Illinois had a two-step higher credit rating than it does today.
- ETFs: MUB, NVG, IIM, NUV, PML, NZF, LEO, PZA, PMF, NEA, PMX, VMO, BFK, EVN, BLE, NXP, KTF, DSM, EIM, VGM, AFB, NPM, PMM, VKI, BKN, MVF, NQM, TFI, MYI, IQI