Wed, Jun. 8, 11:52 AM
- "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, MUA, OIA, MVT, XMPT, MEN, NPI, MYD, VKQ, NMO, PMO, MUE, MMU, NAD, NPP, BBK, EXD, NEV, BYM, NQS, DMF, MFL, BBF, MFM, KSM, MHD, EIV, MQY, MUH, BAF, MFT, MUS, MZF, PRB, MNP, EOT, NUW, DMB, DTF, MQT, NPF, BSD, MYF, NXR, CXH, NXQ, NIM, NMI, VTEB, FMN, VFL, PVI, RVNU, FMB
Jul. 16, 2015, 3:39 PM
- "That's stunningly high," says Van Eck chief municipal strategist Jim Colby, after Chicago priced $1.1B in both taxable and tax-free bonds. The taxable issue maturing in 2042 priced to yield 7.98%, and the tax-free paper maturing in 2039 priced to yield 5.69% - a taxable equivalent yield of 9% (for the highest bracket).
- The debt has been rated BBB+ by Fitch.
- "Chicago is not Detroit," says Colby, who calls this new debt "far and away" the best value of similar credit quality in municipals. He notes the 30-day yield of his Market Vectors High Yield Municipal Index ETF (NYSEARCA:HYD) is just 4.61%.
- ETFs: MUB, IIM, HYD, NUV, PML, NIO, MAV, PZA, LEO, MHI, VMO, NEA, PMF, NMZ, PMX, BFK, EVN, BLE, DSM, KTF, NQU, NXP, VGM, PMM, AFB, VKI, MVF, HYMB, EIM, NQM, NPM, TFI, OIA, BKN, MUA, MEN, PMO, MVT, IQI, MYD, VKQ, NMO, MYI, XMPT, NPI, CMU, MMU, MUE, CXE, EXD, NAD, NMA, BBK, BYM, NPP, NQS, NEV, DMF, MFL, NZF, NVG, NQI, KSM, NPT, MHD, MFM, MUH, NXZ, MQY, SHYD, MFT, MZF, PRB, EIV, BBF, MHF, BAF, EOT, MUS, NUW, NXR, DTF, NPF, MNP, BSD, NXQ, MQT, MYF, DMB, NIM, NMI, CXH, BIE, FMN, PVI, VFL, RVNU, FMB
Seeks current income exempt from regular Federal income tax and to enhance the portfolio value relative to the municipal bond market. It will invest substantially all of its assets in investment grade municipal bonds that are tax-exempt. It may employ fina
Industry: Closed-End Fund - Debt
Country: United States
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