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’Slowdown and showdown in Harrisburg
Remember how Harrisburg filed for Chapter 9 bankruptcy?
Well, as we noted at the time, it’s important to be clear about what we mean by “Harrisburg”. A synechdoche is a slippery thing. Linda Thompson,
Harrisburg, PA files for bankruptcy [updated]
It started with an incinerator and ended with burnt fingers.
From Reuters on Wednesday morning:
(Reuters) – The Harrisburg, Pa., city council passed a resolution on Tuesday night authorizing a Chapter 9 bankruptcy filing,
Dexia still bringing stress to a town near you [updated]
Dexia isn’t just a Franco-Belgian basket case; it’s your basket case too. And since there’s been a bit of talk about the link between the bank and the US muni market here’s our quick take.
As the FT’s Nicole Bullock reminds us,
Michael Lewis and Meredith Whitney in muniland
Following his not-so Grand Tour of Europe, the esteemed vagabond financial scribe Michael Lewis has returned home to report on California for Vanity Fair:
In our opinion, it’s not as perceptive as his articles on Greece or Ireland but it’s still worth an Instapaper click.
The municipal middle man misses out again
Pity the municipal middle man.
Wednesday’s WSJ has an interesting article on covenants that banks are attaching to direct loans made to municipalities seeking refuge from the capital markets. (The Bond Buyer reported back in February on the move toward direct lending.)
The counterparties clearly see a win-win here:
The great wall of Chinese worry
The big holes in Chinese local government balance sheets are back — and bigger than first thought, according to Moody’s.
As widely reported this morning, the rating agency reviewed the National Audit Office’s report on local government debt and concluded that it underestimates banks’ NPL exposure.
LA Conduit-fidential [updated]
The Los Angeles Times and the Bond Buyer have done some interesting reporting in the last three weeks, shedding light on a dark corner of the municipal markets: conduit bonds.
What are conduit bonds? Not for the first time,
Introducing… Kilt-edged securities
At long last, Scotland is to meet the capital markets.
Scotland is one of a rare breed of nations: it has its own legal system but lacks sovereignty. It’s also a fiscal outlier. Unlike sub-sovereign entities in the US,
A bit more on the $775bn of missing muni bonds
Last week FT Alphaville noticed Citi’s claim to have “found” $775bn more municipal bonds in existence than had been previously assumed by most of the market.
The revised aggregate estimate ($3,700bn) came from an upgrade in the amount of holdings by retail and,
29 weeks later: muni bonds after the apocalypse
Nobody tell Meredith Whitney but municipal bond funds finally ended their 29 week run of outflows:
And nobody tell muni bond cork poppers this may be just the flip side to the equities pull back.
Found: $775bn of missing muni bonds
The things one finds underneath the sofa.
FT Alphaville typically estimates the size of the muni market at $2,900bn, based on year-end 2010 data from the Federal Reserve. The FT uses the same figure,
China takes on its massive muni mess with a $463bn bailout
Did you miss this whoppingly-important story out of China?
It seems quite a few people have. Reuters reported on Tuesday that China plans to shift RMB2,000-3,000bn, or $308-463bn, of debt off local governments,
Build America Bonds, redux
John Bellows, Acting Assistant Secretary for Economic Policy, has a post on the US treasury blog calling for the reintroduction of Build America Bonds. It’s quite interesting — honest.
Babs expired in December 2010,
Adventures at the long end of the muni yield curve
The Bond Buyer has a story on Thursday highlighting strong demand for tax-exempt municipal bonds, which despite recent tightening are still trading at above 100 per cent of comparable US Treasuries at the long end of the yield curve.
Whistleblowers in muniland
The Bond Buyer’s Patrick Temple-West has an interesting article on Tuesday based on comments made Friday by the interim director of the IRS’s government entities bond office:
The Internal Revenue Service’s tax-exempt bond office has received referrals of around 30 whistleblower claims of potential abuses in the municipal bond market,
A year of local governments living dangerously
It’s not just the US sovereign that’s recently taken a credit beating.
A Moody’s report on US public finance rating revisions out Tuesday shows how the fiscal ripple effect continues to deteriorate credit conditions in US municipalities.
Recovering from muni defaults
There’s been plenty of hurly-burly lately over forecasts of default rates in the municipal bond market.
But what of recovery amounts, should muni bonds default?
Via Cate Long’s Muniland blog, a paper by RockFleet financial services (RF) argues that forecasts of “hundreds of billions”
DeKalb County, Georgia on municipal minds
On Friday S&P stressed its March 29 five-notch downgrade of the GO and appropriation-backed debts of DeKalb County, Georgia was “not the canary in the coal mine, but more the anomaly”.
But in a municipal market report also out on Friday,
The ripple effect reaches local US governments
The municipal bond market has calmed in the last two weeks as the flight from disaster ushers in a return to relatively safe havens.
But as two annual reports released by Moody’s on Thursday make clear,
A flight to quality to… munis?
That’s what this chart, released on Friday by Citi’s municipal bond team, apparently suggests:
The chart only begins in June 2010, but it shows that Markit MCDX and Markit EM.CDX had been tracking each other for some time before breaking down in late 2010 and early 2011.
Get specific on muni bonds, say Roubini analysts
Municipal bonds, doctor doom will see you now.
The WSJ reports Wednesday that Roubini Global Economics analysts David Nowakowski and Prajakta Bhide estimate there will be about $100bn of muni bond “defaults”
A year in the life of municipal downgrades
From Moody’s on Thursday afternoon, its report on public finance rating revisions in 2010:
Rating activity in 2010 provides further evidence that the municipal market faces credit pressure not seen since the Great Depression.
Illinois pension bond sale – not a disaster
From the WSJ on Wednesday afternoon, provisional details of Illinois’ delayed $3.7bn pension bond sale:
Initial indications on the deal Tuesday showed $6.1 billion in orders, with around a fifth of those coming from international investors,
Charts du jour, muni edition
Worried about public pensions liabilities? Well, look away now.
In a report out Wednesday, The Center for Retirement Research at Boston College tried to isloate the factors that influence (1) the spreads on municipal bond yields,
Cutting out the muni middle man
Here’s a novel idea for municipalities: ignore the prickly muni bond market and accept help from your local Wall St bank.
From the WSJ on Wednesday:
J.P. Morgan Chase & Co. is devoting billions of dollars to direct loans this year to both refinance deals and for new projects,
Regulators and hedge funds in muniland
From the Municipal Securities Rulemaking Board on Tuesday, a little bit more light for all those new investors in the metamorphosising municipal bond market:
For new issues of securities beginning February 14,
The metamorphosis of the muni market
Wednesday’s House hearing into state and municipal debt had a touch of the “Scottish play” about proceedings.
When Meredith Whitney was finally mentioned, Chairman Patrick McHenry quipped that the rules had been broken.
SEC joins the municipal madness
Seems everyone is interested in munis these days.
From Friday’s FT:
The Securities and Exchange Commission has opened an investigation into Rhode Island’s bond offerings, as the regulator steps up scrutiny of the $3,000bn market where states and municipalities raise money.