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PowerShares National AMT-Free Municipal Bond Portfolio ETF (PZA)

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  • Thu, Jul. 16, 3:39 PM
    | 8 Comments
  • Tue, May 12, 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
    | 3 Comments
  • Fri, May 8, 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
    | 8 Comments
  • 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
    | 15 Comments
  • 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
    | 45 Comments
  • Wed, Jan. 7, 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
    | 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
    | Comment!
  • 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
    | 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
    | 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
    | 1 Comment
  • Aug. 28, 2014, 8:04 AM
    • Maybe not wanting competition for federal government debt, U.S. regulators are set to approve a final liquidity rule next week reportedly excluding municipal bonds from being among banks' high-quality, highly liquid assets. Treasurys and balances held at the Fed, of course, would be allowed.
    • Wells Fargo (NYSE:WFC) - with $47.3B - is the largest holder of municipals among the four largest U.S. banks. It hasn't said how much of that amount is included in its liquidity tally, but did say it was compliant with the international rule and awaiting the final U.S. version.
    • Both banks and local governments had naturally argued to include munis in the final rule. "[This] will almost certainly decrease liquidity in asset markets disfavored by the rule," says ABA President Frank Keating.
    • Muni ETFs: MUB, PZA, TFI, XMPT, PRB, PVI, VRD, RVNU, FMB
    • Financial sector ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ
    | 34 Comments
  • 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
    | Comment!
  • Jul. 7, 2014, 1:45 PM
    • As detailed in a recent regulatory filing, Invesco Powershares will update the names and underlying indexes for 3 of its 4 municipal bond ETFs on July 8th.
    • The PowerShares Insured California Municipal Bond Portfolio (PWZ) will be renamed to the PowerShares California AMT-Free Municipal Bond Portfolio and will start tracking the BofA Merrill Lynch California Long-Term Core Plus Municipal Securities Index.
    • The PowerShares Insured National Municipal Bond Portfolio (PZA) will be renamed to the PowerShares National AMT-Free Municipal Bond Portfolio and will start tracking the BofA Merrill Lynch National Long-Term Core Plus Municipal Securities Index.
    • The PowerShares Insured New York Municipal Bond Portfolio (PZT) will be renamed to the PowerShares New York AMT-Free Municipal Bond Portfolio and will start tracking the BofA Merrill Lynch New York Long-Term Core Plus Municipal Securities Index.
    • Other CA, NY and national municipal bond ETFs: PZT, NYF, INY, MUB, PZA, TFI, CMF, XMPT, PRB, PWZ, CXA, PVI, VRD, RVNU, FMB
    | Comment!
  • Jun. 27, 2014, 11:48 AM
    • Losing $403M in funds last week according to Lipper, loan funds (also known as leveraged loans, senior loans, bank loans) saw their 7th consecutive week of outflows - this after a 95-week streak of inflows going back to June 2012. Popular for not just their yields, but the adjustable nature of said yields, a little digging finds the variable nature is tied to Libor - which won't rise until the Fed actually hikes. Further, most loans have Libor floors, which means their rates won't rise until Libor has moved about 75 basis points.
    • ETFs: BKLN, SRLN, SNLN, FTSL
    • Municipal funds and ETFs, however, saw their eighth consecutive week of inflows, taking in $234M last week. ICI data show even bigger gains, with $798M of inflows last week vs. $805M the week prior.
    • ETFs: MUB, PZA, TFI, XMPT, PRB, PVI, VRD, RVNU, FMB
    | Comment!
  • Jun. 24, 2014, 3:14 PM
    • Acknowledging recent heavier municipal issuance of late has been met by solid demand, Citi nevertheless sees "significant reasons for concern," notably anemic muni bond fund flows. With issuance continuing on the heavy side, the team wonders about the capacity of the market to hold unless fund flows rebound. Toss in possibly rising Treasury yields and the effect could be magnified.
    • "We are not, however, suggesting that a very sharp selloff is likely," says Citi noting a huge amount of cash on the sidelines waiting to buy on any significant rebound in yields.
    • ETFs: MUB, PZA, MUNI, TFI, ITM, MLN, SHM, XMPT, PRB, SMB, SUB, PVI, SMMU, MUAF, VRD, MUAE, GMMB, MUAD, MUAC, MUAG, MUAH, RVNU, FMB
    | 2 Comments
  • Jun. 16, 2014, 3:21 PM
    • Moody's boosts New York's credit rating by a notch to Aa1 with stable outlook from Aa2 with positive, reflecting "sustained improvements in fiscal governance, the strength of the recent economic recovery, a strong financial position reflected in improved reserves, and reduced spending growth in line with growth in the state’s economic capacity."
    • "The stable outlook reflects our expectation that the state will preserve and improve upon the gains it has made in governance and its financial position."
    • ETFs: MUB, PZA, TFI, XMPT, PRB, NYF, PZT, PVI, INY, VRD, RVNU, FMB
    | Comment!
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PZA Description
The PowerShares National AMT-Free Municipal Bond Portfolio (Fund) is based on The BofA Merrill Lynch National Long-Term Core Plus Municipal Securities Index (Index). The Fund generally will invest at least 80% of its total assets in municipal securities that comprise the Index and that also are exempt from the federal alternative minimum tax. The Index is composed of US dollar-denominated, investment grade, tax-exempt debt publicly issued by US. states and territories, or their political subdivisions, in the US domestic market with a term of at least 15 years remaining to final maturity. The Index is adjusted monthly and its constituents are capitalization-weighted based on their current amount outstanding. The Fund and the Index are rebalanced and reconstituted monthly.
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Country: United States
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