Karen's Feed
Jan 30, 2012

Illinois facing “financial disaster”: watchdog

CHICAGO (Reuters) – Illinois could see its pile of overdue bills climb to an unprecedented $35 billion in five years if the state fails to rein in pension and other costs, a watchdog group said in a report released on Monday.

“Failure to address unsustainable trends in the state’s pension and Medicaid systems will only result in financial disaster for the state of Illinois,” said Laurence Msall, president of the Civic Federation, the financial government watchdog group that produced the report. Msall said the governor and General Assembly need to act now.

Jan 6, 2012

Moody’s cuts Illinois GO rating to A2 from A1

CHICAGO (Reuters) – Moody’s Investors Service dropped Illinois’ debt rating from A1 to A2 on Friday, the lowest rating level among the U.S. states it rates.

The move, which affects $32 billion of the state’s debt, was triggered by legislative inaction on dealing with Illinois’ underfunded pensions and unpaid bills, the ratings agency said.

Jan 3, 2012

U.S. municipal bonds hit $287 billion in 2011

By Karen Pierog

(Reuters) – U.S. municipal bond issuance sank to a 10-year low of $287 billion in 2011, with J.P. Morgan Securities rising to the top of bond underwriters, according to Thomson Reuters data on Tuesday.

J.P. Morgan (JPM.N: Quote, Profile, Research, Stock Buzz), which ranked third among muni underwriters in 2010, jumped to the top spot in 2011 with $39.2 billion of debt in 387 deals.

Jan 3, 2012

US munis hit $287 bln in 2011, JP Morgan top underwriter

Jan 3 (Reuters) – U.S. municipal bond issuance sank to
a 10-year low of $287 billion in 2011, with J.P. Morgan
Securities rising to the top of bond underwriters, according to
Thomson Reuters data on Tuesday.
J.P. Morgan (JPM.N: Quote, Profile, Research), which ranked third among muni
underwriters in 2010, jumped to the top spot in 2011 with $39.2
billion of debt in 387 deals.
Citigroup (C.N: Quote, Profile, Research) held onto second place for a second year in a
row with $36.6 billion of debt in 333 deals. Bank of America
Merrill Lynch (BA.N: Quote, Profile, Research), 2010′s top underwriter, fell to third
place with $35.3 billion of debt in 352 deals.

Issuance of long-term munis fell 33.3 percent from 2010′s
record high $430.5 billion, Thomson Reuters reported. Negotiated
issuance totaled $227.6 billion last year and competitively bid
deals totaled $59.6 billion. November saw the year’s biggest
burst of bond issuance at $36.4 billion, contributing to a
fourth quarter total of $98.5 billion.

Dec 21, 2011

Michigan sets formal review of Detroit’s finances

By Karen Pierog

(Reuters) – Michigan will launch a formal review of Detroit to determine if a state takeover is warranted, officials said on Wednesday, after a preliminary review found “probable financial stress” for the state’s largest city.

Michigan Treasurer Andy Dillon said the in-depth review, which follows the preliminary review launched on December 6, does not necessarily mean Detroit will be declared to be in a financial emergency or that Governor Rick Snyder would ultimately appoint someone to run it.

Dec 6, 2011

Michigan manager law under siege as Detroit review begins

By Karen Pierog

(Reuters) – A Michigan law giving the state more power over cash-strapped cities is under attack with nine local governments either under state control or inching toward it.

Those cities and school districts include the state’s biggest city of Detroit and have sparked protests among groups who believe the increase in state managers running local governments circumvents the democratic process.

Dec 2, 2011

Michigan starts review of Detroit’s finances

By Karen Pierog

(Reuters) – Michigan said on Friday it will begin a preliminary review of cash-strapped Detroit’s finances in a process that could lead to a state takeover of the city.

“While we have long hoped the mayor and city council would agree on a viable recovery plan, given the mayor’s description of the city’s financial condition and the prospect the city may run out of cash in mere months, it has become clear that a preliminary financial review is not only warranted but necessary,” said Michigan’s State Treasurer Andy Dillon, in a statement.

Dec 1, 2011

Minnesota balances its budget; future gaps loom

CHICAGO – (Reuters) – Minnesota will break a cycle of deficits with its current two-year budget, which is projected to have an $876 million balance, but the state still faces a significant structural budget imbalance in the future, officials said on Thursday.

A $526 million ending balance in fiscal 2011, which topped expectations, coupled with spending cuts in the fiscal 2012-2013 biennial budget, resulted in the projected balance, according to the state’s revenue forecast.

Nov 29, 2011

U.S. airport bonds eyed in American Airlines bankruptcy

CHICAGO (Reuters) – The move by American Airlines to seek bankruptcy protection on Tuesday raised concerns over billions of dollars of tax-exempt debt, particularly issued by airports where the carrier has a big presence.

Kurt Krummenacker, an airport analyst at Moody’s Investors Service, said Chicago’s O’Hare, Dallas/Fort Worth and Miami airports will be particularly watched to see if American’s Chapter 11 filing will have any impact on the roughly $16 billion of general airport revenue bonds (GARBs) sold by those airports.

Nov 29, 2011

Michigan governor approves state takeover of Flint

By Karen Pierog

(Reuters) – Michigan Governor Rick Snyder approved a state takeover of the city of Flint on Tuesday, following a review team’s assessment earlier in the month that the city, a former manufacturing hub for the auto industry, is in a financial emergency.

Snyder named Michael K. Brown, a former mayor of Flint, as the emergency financial manager for the city.