Chris Mier and his team at Loop Capital recently published the 11th Annual Public Pension Funding Review. It is the gold standard for public pension reporting. Mier was onto the pension story well ahead of Meredith Whitney and others, including myself. One thing that is great about Mier’s report is how graphic the pension data is.
I’m not sure anyone in muniland loves numbers more than the members of The National Association of State Budget Officers (NASBO). They are the geek squad who oversees the influx of tax and other government revenues. It’s the daily state money show.
A beautiful thing is happening on Twitter. Local and national reporters are tweeting Chapter 9 municipal bankruptcy hearings as they happen. This is a great service for muniland because there is usually no audio feed at these hearings. Municipal bankruptcies are rare, so each one potentially creates new precedents for those that follow. At the Jefferson County, Alabama hearing to confirm the city’s plan to exit bankruptcy, Kyle Whittemore of the Birmingham News, Katy Stech of the Dow Jones Newswire and Jonathan Hardison of FOX6 WBRC-TV report from the court a day after $1.8 billion of new debt was raised to repay old debt. Bloomberg lays out the back story:
There is no one-size-fits-all condition for state pensions. The condition of state pensions varies from nearly 100 percent-funded plans in Wisconsin, North Carolina, South Dakota, Washington and New York to less than 55 percent in Kentucky, Connecticut, Rhode Island and Illinois.
Jefferson County, Alabama is raising $1.7 billion of new debt to repay $3.1 billion while it is under the protection of the Federal Bankruptcy Court in a Chapter 9 proceeding. A lot of information that normally remains private to the issuer and underwriter has become public.
New legislation introduced by ten U.S. senators called the BRIDGE Act acknowledges that the likelihood that Congress will increase the gas tax or other infrastructure grants is “bleak.” BRIDGE would create a new form of government sponsored entity (GSE) called the Infrastructure Financing Authority (IFA).
I’ve written previously about the local hospital in my community trying to complete a massive expansion in the tiny, historic village of Rhinebeck. Rhinebeck is a 300 year-old American treasure with one of the largest collections of nationally landmarked buildings in the nation. The hospital is surrounded with nationally land-marked homes, including my own.
@Morgan_03 HFs are the new liquidity providers and it don’t come cheap
— Guillermo (@groditi) November 12, 2013
There are plenty of stories about how hedge funds are being lured into buy Puerto Rico debt by big dealers. The Wall Street Journal wrote about hedge funds buying distressed debt. Bloomberg reported that Morgan Stanley, Citigroup and Lazard are holding information sessions for hedge funds to learn about Puerto Rico debt. A trader passed me the presentation from the Citi meeting. It was a detailed explanation of the seniority of Puerto Rico debt and the legal covenants and trading history of specific Puerto Rico issuers and authorities. I would guess Morgan Stanley and Lazard did an equally good job on the background for their clients.