Fri, Apr. 17, 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
Wed, Apr. 1, 12:48 PM| Comment!
Mon, Mar. 2, 1:41 PM| Comment!
Sat, Feb. 28, 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
Mon, Feb. 2, 3:38 PM| Comment!
Dec. 29, 2014, 1:55 PM| Comment!
Dec. 1, 2014, 12:01 PM| Comment!
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
Jul. 11, 2014, 1:59 AM
- U.S. municipal bond funds had some of the biggest outflows since January, after investors pulled out $790M in the week ended July 9. $691M of the outflows was in the high-yield sector, being withdrawn due to default concerns of Puerto Rican debt.
- Adding to the worries is Puerto Rico's newest law which allows for public corporations to restructure their debt. The new law pushed ratings agencies last week to downgrade the commonwealth's bonds even lower within junk territory.
- Barclays High Yield Municipal Bond Index, up more than 9.5% in mid-June, was up less than 5.5% this past Wednesday.
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, HYMB, ITM, MLN, SHM, CMF, XMPT, BABZ, BABS, PRB, SHYD, SMB, NYF, PZT, SUB, PWZ, CXA, PVI, SMMU, INY, MUAF, VRD, MUAD, MUAE, GMMB, MUAC, MUAG, RVNU, MUAH, FMB
Jun. 3, 2014, 3:33 PM
- Issuers have scheduled $11.7B of long-term sales over the next month - the busiest pace in three months - and it's a good thing as investors are about to get the most cash ($104B) in two years from June through August from debt payments, according to JPMorgan's Peter DeGroot.
- The funds received will exceed issuance by about $23B over those months, according to DeGroot, helping to extend munis' best first half rally since 2009.
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SHYD, SUB, SMB, NYF, PZT, CXA, PWZ, PVI, SMMU, INY, MUAF, VRD, MUAD, MUAE, GMMB, MUAC, MUAG, RVNU, MUAH, FMB
May. 30, 2014, 2:47 AM
- Municipal-bond prices have soared so far in 2014, compared to the same time one year ago. 2013 was the markets worst year in almost two decades, after registering losses nationwide - ranging from Detroit's municipal bankruptcy-protection filing to pension costs in Illinois.
- The revival of the $3.7T municipal-bond market comes as bond buyers attempt to find higher investment returns amid dropping U.S. interest rates.
- Investors have also poured $3.1B into municipal-bond mutual funds this year, compared with $2.9Bn over the same period in 2013.
- Municipal bonds have returned 5.8% in 2014, reflecting interest payments and price appreciation.
- Yields on municipal debt fell to 2.3% this past Wednesday, which was their lowest in almost a year. Yields fall when prices rise.
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SHYD, SUB, SMB, NYF, PZT, CXA, PWZ, PVI, SMMU, INY, MUAF, MUAD, VRD, MUAE, MUAG, MUAC, GMMB, FMB, RVNU, MUAH
May. 23, 2014, 10:52 AM
- 2013 produced the slowest annual rate of municipal debt growth in 20 years, says Moody's, which expects the trend to continue this year. The trend "reflects a new conservative attitude toward debt among the states," says analyst Kimberly Lyons.
- The slow pace of borrowing led to a decline in net-tax support debt (NTSD) per capita to $1,054 from $1,074 in 2012.
- In other news, municipal bond funds posted their third straight week of big inflows, adding $664M in the week ended on Wednesday (previous weeks saw $616M and $943M of inflows).
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SHYD, SUB, NYF, SMB, PZT, CXA, PWZ, PVI, SMMU, INY, MUAF, MUAD, VRD, MUAE, MUAG, MUAC, GMMB, MUAH, RVNU, FMB
May. 15, 2014, 4:04 PM
- “A lot of the opportunities have been washed away in the last month and a half,” says BNY Mellon fixed income director John Flahive. “There really isn’t much out there.”
- The muni market is ahead 6.2% YTD, its strongest start since 2009, and benchmark 10-year muni yields have dipped to 2.29%. At work is the general rally in fixed income coupled with a decline in issuance.
- The fund has about $961M in assets vs. an original target size of $1B, and has beaten 83% of peers over the past five years.
- Muni ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SUB, NYF, SHYD, SMB, PZT, CXA, PWZ, PVI, SMMU, INY, MUAF, MUAE, MUAD, VRD, GMMB, MUAC, MUAG, MUAH, RVNU
May. 12, 2014, 4:30 AM
- Stockton is due in court today for a four-day hearing today in which the bankrupt Californian city will attempt to win approval for a plan to pay creditor Franklin Resources (BEN) just 1% of the $35M that the company is owed.
- The case is rare, as these types of disputes are usually settled out of court. However, the hearing could presage a much larger showdown involving Detroit and its creditors.
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SUB, SMB, SHYD, CXA, PWZ, PVI, SMMU, VRD, GMMB, RVNU
May. 1, 2014, 12:14 PM
- Noting the scale and belatedness of the preliminary fiscal 2014 revenue shortfall and the state's likely use of one-time fixes to paper it over, Fitch downgrades New Jersey's $2.4B in outstanding GO debt to A+ from AA-. The rating also affects about $32B in municipal debt linked to the state's outstanding GO debt.
- The ratings outlook remains negative.
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, SHM, BABZ, BABS, XMPT, PRB, SUB, SHYD, SMB, SMMU, PVI, MUAF, VRD, MUAD, MUAE, MUAG, MUAC, GMMB, RVNU, MUAH
Apr. 27, 2014, 3:47 AM
- Detroit has filed the latest version of its debt-reduction proposal after it forged a deal with representatives of tens of thousands of retired city workers.
- Detroit has agreed to ease healthcare and pension cuts, although retirees will still only receive 10-13% of what they would have originally been given for healthcare.
- The deal "puts the city that much closer to emerging from bankruptcy solvent, more credit worthy and better able to provide basic services to its nearly 700,000 residents," said Emergency Manager Kevin Orr.
- The agreement adds to those that Detroit has formulated with several banks, bond insurers and other retiree groups, boosting the chances of the city receiving approval from its creditors for its restructuring plan. However, some bond insurers and unions still haven't come to an agreement with Detroit.
- A vote on the debt restructure could start next month.
- More on Detroit
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SUB, PZT, SMB, NYF, SHYD, CXA, PWZ, PVI, SMMU, INY, MUAF, MUAE, MUAD, VRD, MUAC, MUAG, MUAH, GMMB, RVNU
HYMB vs. ETF Alternatives
The SPDR® Nuveen S&P High Yield Municipal Bond ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the S&P Municipal Yield Index (index ticker: SPMUHT), an index that tracks the US high yield municipal bond market and to provide income that is exempt from federal income taxes.
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- In Your Portfolio: Broad U.S. Bond ETFs, A Guide to Municipal Bond ETFs and Closed-End Funds
- Asset Class Performance: Bonds ETFs
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