Who are muniland’s worst borrowers?

August 24, 2011

Who are muniland’s worst borrowers?

Reuters compiled this data to determine who pays the most to borrow in muniland. Puerto Rico leads the pack again by a wide margin. The spread means that they pay 223 basis points, or 2.23 percent, more than a AAA-rated issuer to find buyers for their bonds. This follows the fundamental bond market principal that if you are more risky, you must pay more to borrow. Curiously Bloomberg reported that Rhode Island paid below market rates yesterday to issue bonds. I guess the Central Falls bankruptcy filing didn’t spook the bond market on Rhode Island issuers after all.

Issuer Spread S&P rating Moody’s rating Debt & unfunded pensions
Puerto Rico 223 BBB (6) Baa1 (6.5) $ 64 B
Illinois 150 A+ (8) A1 (8) $ 76 B
California 94 A- (7) A1 (8) $ 137 B
Michigan 73 AA- (8.5) Aa2 (9) $ 19 B
Nevada 60 AA (9) Aa2 (9) $ 4 B
New Jersey 50 AA- (8.5) Aa3 (8.5) $ 69  B
D.C. 50 A+ (8) Aa2 (9) $ 5 B
Rhode Island 45 AA (9) Aa2 (9) $ 6 B
New York City 42 AA (9) Aa2 (9) $ 161 B
Ohio 34 AA+ (9.5) Aa1 (9.5) $ 14 B

Source:Municipal MarketData, Moody’s Investors Service, Standard & Poor’s Ratings Services, local government budget reports, official statements (Reuters)

Public sector largess

Bloomberg had a fascinating article yesterday about the pay levels for California prison doctors. Their compensation is over 20% higher than their equivalents in the private sector. This is not the only area when public sector workers are paid high salaries — think college sports coaches. From Bloomberg:

Today a prison doctor in California can earn $248,172 a year plus overtime or extra-duty compensation. A chief physician can make as much as $265,648 plus extra pay. According to the Bureau of Labor statistics, the mean annual wage of a physician in the U.S. in 2009 was $180,870; in California, it was $191,650.

Muniland unrest

Quoted without comment from the Columbus Dispatch:

It was public discourse gone wild, a meeting that might appall a civics professor, but one that seemed to energize Mount Sterling’s angry residents.

Charges of mismanagement and ineptitude were hurled at village administrators last night. One councilwoman slammed her shoe on the table after being shouted down. And Mayor Charlie Neff, bowing to calls for his resignation, did just that — and walked out.

It all began last week with news that the village of 1,800 in southeastern Madison County would disband its police department because of deepening budget problems.

@Twitter Talk

OK Policy Institute @OKPolicy OK Policy Institute
Lift the veil on prices: The WSJ suggests websites to compare prices for common medical services & Rx http://ow.ly/6aw4X

Counterparties @counterparties Counterparties

Hospitals are aggressively marketing to draw in ER patients – and Medicaid costs are soaring t.co/fIstueX
OK Policy Institute @OKPolicy OK Policy Institute
In the 15 yrs since welfare reform, recipients have declined 60 percent even as poverty got worse  http://ow.ly/6aw5X
Nigel Cameron @nigelcameron Nigel Cameron
Blair Levin: eliminate state textbook adoption boards. Yah! #TPIAspen
Torey Van Oot @CapitolAlert Torey Van Oot
State audit bashes oversight of leases on public land  scnct.us/hWdsp

+ Good Links +

Huffington Post: Why ‘No New Taxes’?

Bloomberg: U.S. Falls Behind in Race Toward Open Government: Susan Crawford

Christian Science Monitor: States’ bottom line improves, but can the good news last?

Stateline: Pentagon cuts have military states worried

Reuters: States may wade into tax-free market

Reuters: Board: muni advisers’ pay should be monitored

MSRB: MSRB Files Rule G-44, on Supervision of Municipal Advisory Activities

New York Times: 777 School Employees Will Be Let Go, in the Largest Layoff Under Bloomberg

Thomson Reuters News and Insight: Alabama county set for crucial talks with creditors

Government Technology: California County’s Information Exchange Links Justice and Public Safety Agencies

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