PZA
PowerShares National AMT-Free Municipal Bond Portfolio ETFNYSEARCA
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  • Fri, Dec. 2, 2:48 PM
    • S&P's index of municipal bonds fell 3.46% in November, writes Amey Stone in Barron's. That's the worst month since September 2008, when it fell 4.83%.
    • That interest rates rose sharply in November isn''t news, but S&P Dow Jones' J.R. Rieger says potential tax reform in which the highest marginal tax rate could be cut lowers the attractiveness of municipals.
    • Munis, says Rieger, are a retail-driven market, and thus sensitive to changes in sentiment and quick reversals in fund flows.
    • ETFs: MUB, NVG, IIM, NEA, NUV, NAD, PML, NZF, LEO, PZA, PMF, PMX, VMO, BFK, EVN, BLE, NXP, KTF, DSM, EIM, VGM, AFB, PMM, VKI, BKN, MVF
    | Fri, Dec. 2, 2:48 PM | 17 Comments
  • 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
    | Wed, Jun. 8, 11:52 AM | 50 Comments
  • 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
    | Wed, Jun. 8, 11:52 AM | 6 Comments
  • Thu, Mar. 24, 11:15 AM
    • Coming nearly a year after it struck down a state plan to overhaul its retirement system ($111B shortfall), the Illinois Supreme Court does the same to Chicago and its $20B pension deficit.
    • The decision leaves the city needing to figure out a new way to shore up its retirement plans. It needs to make about an $886M payment this year - more than twice what was necessary a decade ago - and its already pushed through a record property-tax hike. Currently only Detroit among large U.S. cities has a lower credit rating than Chicago.
    • ETFs: MUB, IIM, NUV, PML, NIO, PZA, LEO, NEA, VMO, PMF
    | Thu, Mar. 24, 11:15 AM | 32 Comments
  • Nov. 12, 2015, 3:00 PM
    • There was a 20% jump in the number of requests for new municipal bond security identifiers, according to the CUSIP Issuance Trends Report - the first increase in five months.
    • While the start of Q4 and the beginning of a new fiscal year for many towns explains some of the jump, says CUSIP's Gerald Faulkner, the near-certain closing of ZIRP also plays a role.
    • It's a "dash for debt"  says S&P Capital IQ's Richard Peterson.
    • ETFs: MUB, IIM, NUV, PML, NIO, PZA, LEO, VMO, PMF, NEA, PMX, BFK, EVN, BLE, DSM, KTF, NQU, NXP, VGM, PMM
    | Nov. 12, 2015, 3:00 PM | 11 Comments
  • Sep. 9, 2015, 2:12 PM
    • General obligation bonds have been viewed as essentially default-proof forever, but part of Puerto Rico's five-year plan to restructure its $72B in debt includes the Commonwealth's GO paper.
    • These bonds were issued with a constitutional promise that the government would pay the debt service ahead of any other bills it has. "Unheard-of" is how the plan is described in a NYT article pondering the spillover effect to other GO debt should Puerto Rico successfully restructure.
    • Bond investors will no doubt put up a major fight, and Van Eck strategist Jim Colby expects a constitutional battle. Moody's Ted Hampton agrees, and sees a high probability of a long legal war.
    • Source: Barron's
    • ETFs: MUB, IIM, NUV, PML, NIO, PZA, LEO, VMO, NEA, PMF, PMX, BFK, EVN, BLE, DSM, KTF, NQU, NXP, VGM, PMM, AFB, MVF, VKI, EIM, NQM, NPM, TFI, OIA, BKN
    | Sep. 9, 2015, 2:12 PM | 7 Comments
  • Jul. 16, 2015, 3:39 PM
    | Jul. 16, 2015, 3:39 PM | 8 Comments
  • May 12, 2015, 5:38 PM
    • The city of Chicago's credit rating is downgraded to junk level Ba1 from Baa2 with a negative outlook at Moody's, which cites the recent Illinois court ruling voiding state pension reforms.
    • The downgrade affects $8.1B of outstanding general obligation debt, $542M of outstanding sales tax revenue debt, and $268M of outstanding and authorized motor fuel tax revenue debt.
    • The ratings agency also downgrades the city's senior and second lien water bonds as well as senior and second lien sewer bonds.
    • Moody's says Chicago's options for curbing growth in its unfunded pension liabilities have narrowed considerably, and expects the costs of servicing the city's unfunded liabilities will grow, placing significant strain on financial operations with commensurate growth in revenue and/or reductions in other expenditures.
    • ETFs: MUB, PZA, TFI, XMPT, PRB, PVI, RVNU, FMB
    | May 12, 2015, 5:38 PM | 3 Comments
  • May 8, 2015, 2:51 PM
    • Trying to get a handle on a pension shortfall estimated at more than $100B, Illinois two years ago passed reform to rein in benefits, but the state Supreme Court today says the overhaul violates the state's constitution.
    • The ruling upholds a  decision late last year by a state circuit court.
    • Among the reforms struck down were smaller COLA's, higher retirement ages, and capping the size of pensions.
    • ETFs: MUB, PZA, TFI, XMPT, PRB, PVI, RVNU, FMB
    | May 8, 2015, 2:51 PM | 8 Comments
  • Apr. 17, 2015, 1:54 AM
    • In a change of heart, the Federal Reserve will allow big U.S. banks to use some types of municipal bonds to meet new rules that ensure they have enough cash during a market meltdown, WSJ reports.
    • At issue is the treatment of municipal debt under new liquidity requirements, which call for large banks to hold enough "high-quality liquid assets" to fund their operations for 30 days.
    • Other regulators, including the OCC and FDIC, do not plan to follow the Fed's new criteria.
    • ETFs: MUB, HYD, BAB, PZA, MUNI, HYMB, TFI, XMPT, ITM, MLN, BABS, SHM, CMF, SHYD, PRB, NYF, PZT, SUB, SMB, PWZ, CXA, IBMF, PVI, RVNU, INY, SMMU, IBMG, IBME, IBMD, GMMB, FMB, IBMI, IBMH, MEAR
    | Apr. 17, 2015, 1:54 AM | 15 Comments
  • Feb. 28, 2015, 7:45 AM
    • Chicago's credit rating was downgraded Friday by Moody's to Baa2, two notches above junk, with a negative outlook on the “expectation that the city’s credit quality could weaken as unfunded pension liabilities grow and exert increased pressure on the city’s operating budget."
    • Chicago's four pension funds have ~$20B in unfunded debt, and without further action the city would need to increase its payments to those accounts by $600M next year and even more after that.
    • The rating includes the city’s $8.3B billion of outstanding GO debt, $542M of outstanding sales tax revenue debt, and $268M of outstanding or authorized motor fuel tax revenue debt.
    • The downgrade could immediately terminate four interest rate swap agreements, costing the city ~$58M, and potentially lead to terminations of 11 more swaps deals that could cost another $133M.
    • Also yesterday, S&P warned it could slap its own multi-notch downgrade on Chicago in the absence of a plan this year to deal with the pension crisis.
    • It's all another big headache for Mayor Rahm Emanuel, who is facing a surprise run-off in his bid for re-election.
    • Muni ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABS, XMPT
    | Feb. 28, 2015, 7:45 AM | 45 Comments
  • Jan. 7, 2015, 3:49 PM
    • The ETF version of the Vanguard Tax-Exempt Bond Index Fund will cost just 0.12% vs. 0.25% for the $4.2B AUM iShares National AMT-Free Muni Bond ETF (NYSEARCA:MUB). Both ETFs will track the same S&P National AMT-Free Municipal Bond Index.
    • Vanguard already operates active muni funds, but this one will be passive.
    • One of the "gaps in Vanguard's lineup" is no more, says S&P Capital IQ's Todd Rosenbluth.
    • ETFs: MUB, PZA, TFI, XMPT, PRB, PVI, RVNU, VRD, FMB
    | Jan. 7, 2015, 3:49 PM | 1 Comment
  • Nov. 14, 2014, 3:13 PM
    • The muni bond market typically slows towards the end of the year, but issuers - all trying to take advantage of low rates - might temporarily overwhelm demand in coming weeks, and allow for some bargains in the secondary market.
    • "Individual investors should be paying close attention and remain engaged," says Morgan Stanley. "The potential for temporary periods of outsized ($8B or more) issuance specifically surrounding Thanksgiving week could also create a temporary supply/demand imbalance in the primary market."
    • Longer-term, the team remains cautious thanks to its (and everyone else's) expectation that rates should rise next year.
    • ETFs: MUB, PZA, TFI, XMPT, PRB, PVI, RVNU, VRD, FMB
    | Nov. 14, 2014, 3:13 PM
  • Nov. 7, 2014, 2:25 PM
    • Judge Steven Rhodes has ruled the city's restructuring plan - notable for the sizable losses it imposes on bondholders while preserving much of Detroit's pension liabilities - is fair and feasible.
    • "The city is insolvent and desperately needs to fix its future," says Rhodes, who calls the Detroit's settlement with pensioners a nearly "miraculous" outcome.
    • The city is expected to exit bankruptcy within weeks.
    • ETFs: MUB, PZA, TFI, XMPT, PRB, PVI, RVNU, VRD, FMB
    | Nov. 7, 2014, 2:25 PM | 3 Comments
  • Oct. 31, 2014, 2:53 PM
    • "October 1 was an academic exercise," says a pension-law expert. "[Thursday] was a reality check." The lawyer is referring to a bankruptcy judge yesterday approving Stockton, CA's reorganization plan which leaves untouched its pension obligations. On Oct. 1 that same judge had ruled Stockton could cut its payments to Calpers as it emerged from bankruptcy.
    • Ultimately, city managers - already faced with a hard time retaining municipal workers - decided slashing pension benefits would force an even quicker rush to the exits.
    • Losers when the ruling was issued, government pension plans and organized government labor groups are pleased, but advocates for pension reform say the reorganization plan is a mistake as it allows the city to exit bankruptcy without dealing with the pension obligations which helped put it there in the first place.
    • Monolines today: Ambac (AMBC +4.7%), Assured Guaranty (AGO +1.8%), MBIA (MBI +1.1%).
    • Muni ETFs: MUB, PZA, TFI, CMF, XMPT, PRB, PWZ, CXA, PVI, RVNU, VRD, FMB
    | Oct. 31, 2014, 2:53 PM | 2 Comments
  • Oct. 17, 2014, 4:10 AM
    • Detroit has taken a major step towards exiting bankruptcy protection after agreeing to a deal with with its largest holdout creditor, Financial Guaranty Insurance Company, which is owed $1B.
    • Under the settlement, Financial Guaranty will have the rights to develop a hotel, retail and condominium complex on the site of the Joe Louis Arena, the soon-to-be-vacant home the Detroit Red Wings hockey team.
    • The dispute between Detroit and Financial Guaranty had threatened other important deals that the city had forged with thousands of creditors.
    • ETFS: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABS, XMPT, PRB, SUB, PZT, SMB, NYF, SHYD, CXA, PWZ, PVI, SMMU, INY, VRD, GMMB, RVNU
    | Oct. 17, 2014, 4:10 AM | 1 Comment
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