iShares Short-Term National AMT-Free Muni Bond ETF (SUB) - NYSEARCA
  • Nov. 8, 2013, 3:20 PM
    • Assured Guaranty (AGO +2.7%) and MBIA's (MBI +1.3%) municipal insurance unit National Public Finance Guarantee sue Detroit over using property tax money earmarked to pay general obligation bonds, and ask the judge overseeing the city's bankruptcy petition to force the city to set the cash aside.
    • Emergency manager Kevyn Orr has upset municipal bond markets by including more than $400M of GO bonds in Detroit's nearly $12B of "unsecured" debt. The October 1 default triggered most of a $9.37M interest payment due on that paper to have to be made by Assured and National.
    • The lawsuit also raises the insurers' concern about the $350M debtor-in-financing deal Detroit reached with Barclays in October. They want the court to prohibit the city from giving any creditor "super-priority status" in which those property tax payments again may be diverted from the GO bonds.
    • The next payment due on the bonds - $47.6M - is due on April 1.
    • Also keeping an eye on the proceedings is Ambac (AMBC).
    • Muni ETFs: MUB, PZA, MUNI, TFI, ITM, MLN, XMPT, SHM, SUB, PRB, SMB, SMMU, PVI, VRD, GMMB, RVNU
    | Nov. 8, 2013, 3:20 PM | 1 Comment
  • Oct. 28, 2013, 3:38 PM
    • Municipals (MUB) aren't just trading cheap relative to Treasurys (TLT), but also to corporates (LQD), argues JPMorgan.
    • The observation isn't a huge surprise, but the team notes continued light supply of municipals as a supporting factor - there's been an average of $5.6B per week in issuance since rates turned higher in May vs. and average of $7.2B per week from January to April. It turns out the refinance market for local governments has slowed along side that of homeowners.
    • JPMorgan doesn't expect a "sustained uptick" through the end of the year, but what about this fall's big drop in rates?
    • Muni ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY.
    • IG Corporate ETFs: LQD, CBND, CORP, FLTR, FLRN, ITR, LWC, SCPB, VCIT, VCLT, VCSH, IGU, IGS, CSJ, QLTA, QLTB, BSCI, BSCJ, BSCK, BSCL, BSCM.
    | Oct. 28, 2013, 3:38 PM
  • Oct. 23, 2013, 3:08 PM
    • The country has "entered a less benign period for public finance," says Pimco municipal managers Joseph Deane, David Hammer and Sean McCarthy. "The inability of states and territories to avail themselves of Chapter 9 bankruptcy only increases the risk of a more disorderly outcome, since they can still default on payments, triggering a need to restructure."
    • While not anticipating a big bump in muni defaults, the team is keeping an eye on "pockets of credit stress" in municipalities and the territories. Likely talking about Detroit (as opposed to Puerto Rico), they say "willingness to pay may simply fall short of capacity, and restructuring may be a rational economic consideration."
    • Avoid smaller issuers with large and growing fixed costs (unfunded pensions), they say. Position defensively, and take advantage of volatility by buying duration. They note high-quality 30-year municipals could have been purchased in June and July at yields equivalent to the 30-year Treasury - a big discount from the 85-90% of the long bond yield they usually trade at.
    • Muni ETFs: Broad: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY , NYF, PZT, INY, CMF, PWZ, CXA, BAB, BABZ, BABS.
    | Oct. 23, 2013, 3:08 PM
  • Oct. 22, 2013, 3:48 PM
    • National closed-end funds are trading at an average 6% discount to NAV vs. a typical 1%, and with a yield of about 7%. Top picks are Neuberger Berman Intermediate Duration Fund (NBH +2.1%) and BlackRock Muni Income Trust (BFK +0.2%).
    • As for state funds, they're more likely to have higher exposure to Puerto Rico as - other than paper within their home state - they're also allowed to buy the bonds of U.S. territories. Those with notably higher exposure to PR are: Neuberger Berman CA Intermediate Municipal Fund (NBW -0.1%), BlackRock Muniholdings NJ Quality Fund (MUJ -0.2%) and BlackRock NY Muni Income Trust (BNY -0.2%).
    • As for the broader picture, UBS says the muni bond market has “entered into a transitional phase," in which they're no longer a "rates" product, but one valued on "credit." Not expecting a wave of bankruptcies, UBS does see an increase in the number of governments seeking protection. "We expect conventional notions regarding the homogeneity of municipal bonds to dissipate."
    • Muni ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY, NYF, PZT, INY, CMF, PWZ, CXA.
    | Oct. 22, 2013, 3:48 PM
  • Oct. 14, 2013, 12:39 PM
    • "The time to buy securities is when there are explosions going all around,” says Loop Capital's Chris Mier, talking about bargains in municipals thanks to Detroit and Puerto Rico. Nearly $44B has been pulled from muni-bond funds this year, the fastest pace on record, according to Lipper. The average yield on high-grade bonds is 3.13% vs. 2.17% at the end of 2012, and the sale of new muni paper is off 15% from a year ago.
    • States account for more than $500B of muni debt and 14 carry AAA ratings - just 4 U.S. companies are rated AAA. "“Investors have overreacted and worry that problems may be everywhere,” says Eaton Vance's Jim Evans. “There are definitely some difficulties, but the vast majority of credits are in good shape.”
    • See also: Puerto Rico muni prices plummet 6.6% in October, off nearly 25% YTD.
    • ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY, NYF, PZT, INY, CMF, PWZ, CXA.
    | Oct. 14, 2013, 12:39 PM | 1 Comment
  • Oct. 4, 2013, 4:15 AM
    • Stockton's council has authorized a plan that will allow the Californian city to exit bankruptcy protection after it agreed with bond insurer Assured Guaranty (AGO) to restructure over $150M in loans.
    • Stockton now has deals with all but three of its 19 major creditors, including with all the relevant bond insurers. The city hopes to file the plan to exit bankruptcy early next week and then leave Chapter 9 protection in around six months.
    • The deal with Assured is dependent on court approval and on voters backing an increase in sales tax. (Previous)
    • Muni ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, CMF, PWZ, CXA
    | Oct. 4, 2013, 4:15 AM
  • Sep. 30, 2013, 1:42 PM
    • Municipals are cheap relative to the rest of fixed-income on a tax-equivalent yield basis not just to those in high tax brackets, but for those on lower rungs as well, says Vanguard's municipal operations chief Chris Alwine. As opposed to the rest of fixed-income, munis tend to be dominated by individual investors, and hence are more prone to short-term volatility, he argues.
    • While muni investors tend to be homogenous, the market itself is very much heterogeneous and "shouldn't be brushed with broad strokes." - is Meredith Whitney listening? There are about $3.7T in assets, with more than 95K issuers, and a majority of the market is AA-rated. In other words, according to Alwine, Detroit is an outlier, not a game-changer.
    • Relevant ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY.
    | Sep. 30, 2013, 1:42 PM
  • Sep. 27, 2013, 3:37 PM
    • Detroit has $18.5B in debt obligations and none of the $300M will go in that direction. Instead the money will be used for transportation and demolishing of buildings. "There is nothing we can do to help on the bankruptcy; there is no bailout," says the WH's Gene Sperling. "(It's) like dumping a cup full of water in Lake Michigan," writes Yahoo's Jeff Mackeon.
    • Chicago next? It's pension liabilities are 678% of revenue, dwarfing Detroit's ratio.
    • Meanwhile, the bond insurers (MBI, AGO, AMBC) have fallen and can't get up as they mull over not just Detroit, but maybe the far larger issue of Puerto Rico.
    • Muni ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY.
    | Sep. 27, 2013, 3:37 PM | 3 Comments
  • Sep. 26, 2013, 11:10 AM
    • Ten days ago, owning no municipal bonds (MUB) and investment-grade corporate debt (LQD), Sierra Investment Management is buying "with both hands and feet." Behind the decision is Sierra's belief the Fed won't taper for several more months as the sharp increase in mortgage rates deals a blow to housing.
    • This should send bond yields lower over the next six months, with the 10-year Treasury perhaps returning to under 2%.
    • "We move tactically, with discipline ... We buy when a category price turns from downward to upward. We believe high-grade corporates and munis are undervalued relative to Treasurys."
    • Muni ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY.
    • IG corporate ETFs: LQD, CBND, CORP, FLTR, FLRN, ITR, LWC, SCPB, VCIT, VCLT, VCSH, IGU, IGS, CSJ, QLTA, QLTB, BSCI, BSCJ, BSCK, BSCL, BSCM.
    | Sep. 26, 2013, 11:10 AM | 3 Comments
  • Sep. 25, 2013, 7:53 AM
    • "The potential impact of Puerto Rico on the municipal market is difficult to overstate," writes Jeff Westergaard at Morningstar, which views events there as the most important since the near-meltdown of NYC in 1976.
    • Unlike Detroit, Puerto Rican debt is widely held due to its "double-tax-free" benefit, and many individuals in high-tax states hold the paper individually or in funds. Also, the amount of Puerto Rican debt out there is several multiples of that of Detroit.
    • As a territory Puerto Rico cannot take advantage of Chapter 9 - "without engaging in speculation, it is safe to say that all muni market participants have a vested interest in a positive outcome for the commonwealth."
    • Muni ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY.
    | Sep. 25, 2013, 7:53 AM
  • Sep. 20, 2013, 8:42 AM
    • There were $1.1B in withdrawals from municipal bond mutual funds and ETFs in the week ended Wednesday, according to Lipper, bringing the string of weekly outflows to 17 straight. Losses during this stretch now sum to $26.7B.
    • Munis have a few things going against them: First, it's the general skittishness in fixed income as rates rise. Second, the Detroit bankruptcy has many wondering if other municipalities will follow suit. Puerto Rico comes to mind, but - unlike the case with Detroit - the territory's leadership shows little sign of wanting to stiff creditors. Third is yet another regurgitation of rumors that D.C. lawmakers have their eye on the income tax exemption.
    • MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY.
    | Sep. 20, 2013, 8:42 AM
  • Sep. 6, 2013, 3:10 PM
    • Municipal bond mutual funds and ETFs reported $1.3B in investor withdrawals in the week ended Wednesday, according to Lipper, Over the 15 consecutive weeks of outflows, the funds have lost $23.7B.
    • The rout in muni prices smells like opportunity to some, including insurer ACE limited, which boosted its muni holdings by 15% in the first half of the year. Smaller investors like what they see too, as transactions of $100K or less accounted for 85% of muni trades in July and August - the highest proportion since at least 2006.
    • "The combination of being able to lock in the higher yields for such a long period of time, which matches our liabilities, makes it very attractive," CNA Financial's SVP James Anderson, also boosting holdings of muni paper.
    • Related ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY,
    | Sep. 6, 2013, 3:10 PM | 1 Comment
  • Aug. 29, 2013, 3:53 AM
    • Federal Bankruptcy Judge Meredith Jury has ruled that the Californian city of San Bernardino is eligible for Chapter 9 bankruptcy protection, overruling opposition from California Public Employees' Retirement System (Calpers), the city's largest creditor.
    • The key question is whether Calpers should be treated like other debtees. The pension fund says no, citing California law, while other creditors say yes, arguing that federal statues trump state law. It's an argument that is being closely watched and one that could reach the Supreme Court.
    • Related ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, CMF, PWZ, CXA
    | Aug. 29, 2013, 3:53 AM | 4 Comments
  • Aug. 27, 2013, 2:50 AM
    • The receiver for insolvent Harrisburg has agreed with creditors who are owed $362.5M on proposals to end the city's financial crisis and avoid another bankruptcy filing.
    • The capital of Pennsylvania plans to sell its waste-to-energy plant and lease its parking system. While that wouldn't fully repay the creditors, they could receive more money later, such as from revenue from a fuel tax and from future parking income.
    • The settlement needs the approval of the judge overseeing the case.
    • The creditors include bond insurer Assured Guaranty (AGO) and Dauphin County, who would receive $210M out of claims of almost $300M.
    • ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU
    | Aug. 27, 2013, 2:50 AM | 4 Comments
  • Aug. 21, 2013, 3:56 AM
    • Moody's has lifted its collective outlook on U.S. states to stable from negative, the first time the ratings agency has improved its view of states since the financial crisis.
    • "Improving labor and housing markets have boosted consumer confidence, and strong stock-market performance has further improved state revenues," Moody's analyst Baye Larsen explained.
    • Credit quality is high, with 30 states holding the two highest ratings, AAA or or Aa1. Due to its massive pension gap, Illinois has the lowest rating among states, A3.
    • The local government outlook remains negative. (PR)
    • ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NYF, PZT, INY, CMF, PWZ, CXA, BAB, BABZ, BABS
    | Aug. 21, 2013, 3:56 AM | 3 Comments
  • Aug. 20, 2013, 3:10 AM
    • Labor unions, pension funds and individuals have submitted their objections to Detroit's request for bankruptcy protection.
    • However, bondholders and bond insurers didn't file their opposition by last night's deadline despite the billions of dollars at stake. It wasn't immediately clear why not.
    • The arguments against Detroit's Chapter 9 filing include that it breaches state and national constitutions, that the city didn't negotiate in good faith, as it should have done, and that it hasn't proven that it's insolvent.
    • ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU.
    | Aug. 20, 2013, 3:10 AM
SUB Description
The iShares S&P Short Term National AMT-Free Municipal Bond Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the municipal bond sector of the U.S. market as defined by the S&P Short Term National AMT-Free Municipal Bond Index.
See more details on sponsor's website
Country: United States
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