The PIMCO Short Term Municipal Bond Strategy Fund is an actively managed exchange-traded fund (ETF). Designed to be appropriate for investors seeking tax-exempt income, the Fund consists of a diversified portfolio of primarily intermediate duration, high credit quality bonds, which carry interest income that is exempt from federal tax and in some cases state tax. With this Fund, investors will see the names of the bonds owned daily. In addition, the Fund will not use options, futures or swaps.
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Friday, December 14, 2012, 2:21 PM
The MUB slides another 1% as no one in D.C. has yet denied rumors municipal bond interest's tax-exempt status may get served up as part of a budget deal. The ETF has lost about 2.4% of its value over the last 2 weeks - roughly equivalent to the fund's annualized yield.
1 Comment[Financials, U.S. Economy]
Wednesday, December 12, 2012, 8:59 AM
Municipal bond investors may not be pleased on a rare spot of agreement between the White House and the GOP: A willingness to subject to tax a portion of municipal bond interest paid to higher-income households (are there any muni bond holders who aren't higher income?).
9 Comments[U.S. Economy, Financials]
Tuesday, December 11, 2012, 4:54 PM
San Bernardino's creditors square off with a group of Wall Street bondholders arguing they should have the same status as Calpers in the city's bankruptcy proceedings. Among the creditors are Ambac and a unit of MBIA (MBI). A loss by the creditors would have major repercussions for municipal finance - look for the case to make its way to the Supreme Court at some point.
2 Comments[U.S. Economy]
Thursday, December 6, 2012, 1:26 PM
"The margin for error is so thin," says Morgan Stanley's Michael Zezas, no longer a bull on municipal debt. With yields this low, all it would take is an 18 basis point move higher in rates to wipe out a year's worth of interest income. "We can't envision a scenario in which muni yields would hold while U.S. Treasury yields moved."
Friday, November 30, 2012, 3:21 PM
Amidst speculation tax rates are going higher and will force more money into tax-privileged sectors, investors drive the iShares Municipal Bond Fund (MUB) to an all-time high. At $114.02, the fund has been trading above its NAV (currently 113.11) since mid-July. More room to run? BlackRock points out municipals yield more than Treasurys, and that's before taking the tax-advantage into effect.
3 Comments[U.S. Economy]
Friday, November 30, 2012, 3:07 AM
With 2-3 weeks to receive $30M of state aid from Michigan in order not to run out of cash, Detroit is again teetering on the brink of bankruptcy. The aid is contingent of the city implementing the provisions of an agreement in April, when Michigan agreed to provide $137M, but those measures haven't been enacted. Financial mismanagement, political corruption, a hard-hit housing market and a massive loss of population are the causes of Detroit's woe. 9 Comments[U.S. Economy, Top Stories]
Wednesday, November 28, 2012, 10:44 AM
The stakes are raised as Calpers moves to sue San Bernardino over the bankrupt city's decision to halt its bi-weekly payments to the fund. The precedent-setting case will have major implications for the way bondholders and insurers are treated in a municipal bankruptcy. If Calpers loses - good for creditors. If Calpers win - not so good. It's hard to imagine this not making its way to the Supreme Court.
Monday, November 26, 2012, 3:45 PM
Massive shortfalls in Pennsylvania's two public pensions puts the state - absent major reform - on a path to either cut benefits or slash core government functions, says budget secretary Charles Zogby. State revenue - expected to rise $819M in FY2014 - will be nearly completely consumed by pension cost increases of $511M.
10 Comments[U.S. Economy]
Tuesday, November 20, 2012, 5:40 AM
Bankrupt Californian city San Bernardino presented a new budget yesterday in which it proposed renegotiating its obligations to the Calpers pension fund as part of its restructuring. San Bernardino is being closely watched, as Wall Street bondholders have indicated that they plan to challenge Calpers' historical primacy as a creditor in bankruptcy cases.
Monday, November 12, 2012, 12:40 PM
David Kotok turns "extraordinarily bullish," saying markets are ignoring easy-money politices being in place not just here, but worldwide, for a very long time. Stocks, investment-grade paper, high-grade municipal paper - they're all headed far higher.
Tuesday, November 6, 2012, 7:16 AM
Though damage from Sandy is expensive - an expected $10-$20B in insured losses - don't expect the P&C industry to unload portfolios of municipal bonds to pay for it, says JPMorgan. Prior to Sandy, catastrophes have been unusually low of late, putting the insurers - which hold about 9% of outstanding munis - in good shape.
Thursday, October 25, 2012, 3:53 PM
Credit-rating cuts came for more than $200M of municipal debt through September, greater than the entirety of 2011, according to Moody's (Credit Outlook), which expects further deterioration through year's end. There have been upgrades as well, but these are slowing, Q3's being about half the level of Q2's.
1 Comment[U.S. Economy]
Monday, October 22, 2012, 12:34 PM
A story worth following unfolds in California where San Bernardino attempts to get a handle on pension costs by stopping biweekly contributions to Calpers. "A David and Goliath moment," says a bankruptcy attorney. At stake? Check out Vallejo, whose average post-bankruptcy pension costfor a fireman is greater than the starting salary of a NYC fireman. More than $200K to pay a safety worker? It's hard to make the numbers work.
5 Comments[U.S. Economy]
Wednesday, October 10, 2012, 7:58 AM
The debt of 30 California cities - including Oakland, Fresno, and Sacramento - is placed under review for downgrade by Moody's. The move follows Moody's August report in which it noted bankruptcy is likely to become a new tool for cities trying to get concessions from bondholders.
7 Comments[U.S. Economy]
Tuesday, October 2, 2012, 1:20 PM
The Chicago Board of Education's $6.1B in general obligation bonds get downgraded to A/Negative outlook from A+/Neg.Outlook by Fitch. The recent strike settlement results in "considerable increased costs" at a time of "highly stressed operations," says the agency, and already weak pension funded ratios have been exacerbated.
Friday, September 28, 2012, 11:25 AM
Municipals remain a good bet, writes Cumberland's John Mousseau, as overall credit quality is improving (despite some high-profile Chapter 9 filings). There's also supply constraint as muni bond issuance may seem high, but a good chunk of the proceeds are being used to call older paper, making net issuance quite small.