Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for July 14, 2014:

Good news:

Muni mutual fund snapshot:


Puerto Rico:


Puerto Rico’s latest debt effort


Puerto Rico

The struggling Puerto Rico government was sideswiped when reports emerged that the island’s Resident Commissioner Pedro Pierluisi had asked the U.S. Congress to consider amending the federal bankruptcy code.

Pierluisi wants to give Puerto Rico public corporations the right to seek protection to reorganize in federal court under Chapter 9 of the bankruptcy code, rather than use the island’s newly passed Public Corporation Debt Enforcement and Recovery Act.

The Puerto Rico government reacted with faint praise, but it failed to point out that Pierluisi’s plan, if executed, would deny Puerto Rico’s electric utitlity [PREPA] the right to haircut bondholders. This is because Prepa issues revenue bonds that are protected by Chapter 9 in the bankruptcy process. Pierluisi’s approach would handcuff the Puerto Rico government in their effort to restructure Prepa’s debt.

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for July 11, 2014:

Macro motions:


Will Stockton get pension reform in bankruptcy?


Although the Detroit bankruptcy case gets the lion’s share of media attention, the bankruptcy proceedings in Stockton, California might have longer-term implications for muniland.

Detroit’s federal bankruptcy judge Stephen Rhodes quickly determined in his eligibility ruling that the city may reduce retiree pensions. But Stockton’s judge, Christopher Klein, has been making his way to a decision about the legality of cutting pensions for two years. Klein has set October 1 as the next date to possibly rule on the issue.

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for July 10, 2014:

Important thinking about federal taxation of corporations:

State Economic Monitor:


Standard & Poor’s on muniland conditions:

Colleges and universities need to think about their business models:


Looks like muniland money market funds will be excluded from a new SEC rule:

Municipal bond funds will survive a Puerto Rico shakeout

Puerto Rico

Barron’s had a recent story, “Puerto Rico’s Debt Woes Could Spread,” that says, “As mid-year statements go out, muni-fund redemptions could force selling of other credits.” Barron’s author Randall Forsyth wrote:

But the effects of legislation to allow restructuring of the debt of the [Puerto Rico] so-called public corporations continue to ripple through the municipal bond market. Thus far, those ripples have been contained, with little spillover into the broader muni market.

That could change, however, when holders of tax-exempt bond funds — especially the high-yield variety — get their June 30 statements. How these individual investors react to the funds’ declines from their exposure to Puerto Rico debt could hit the broader muni market if funds are forced to liquidate bonds to meet shareholder redemptions.

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for July 9, 2014:

Bad news for federal revenues:

Good news about a big expense for states:


A real and growing issue for muniland:

Puerto Rico and the eternity of sovereign debt

Puerto Rico

Does Puerto Rico ever intend to pay its debts? Or is borrowing from the municipal market too easy? Is debt an addictive drug that politicians can’t resist?

Cleary Gottlieb Steen & Hamilton is one of the law firms hired by the government of Puerto Rico for advice on potential restructuring of some or all of its debt. Lee Buchheit is a Cleary partner who also represented the Greek government during its debt restructuring. Buchheit recently published a book, titled Sovereign debt in the light of eternity.” In it, Buchheit identified the central question, “why is sovereign debt such a pressing problem for modern democracies? And what are the alternatives?”

I excerpted some of his talk below. Although Puerto Rico is classically known as a “municipal” borrower, it is also a sovereign borrower, like a U.S. state. (Buchheit begins at 6:22):

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for July 8, 2014:

The ongoing question of whether Congress will change the municipal bond tax exemption:

Muniland technicals remain strong:


Puerto Rico:

Illinois’ expensive retiree health care ruling


Illinois suffered a blow when the State Supreme Court ruled that public employee retiree health benefits are enshrined in the state constitution and may not be adjusted via legislation. Illinois has lost an important tool for reducing $56 billion of unfunded retiree health care liabilities and $100 billion in unfunded pension liabilities. These unfunded retiree costs outstrip the state’s $33 billion of net tax supported debt.

The Chicago Tribune wrote:

The Illinois Supreme Court ruled today that subsidized health care premiums for retired state employees are protected under the Illinois Constitution, signaling potential trouble for an overhaul of pension benefits that’s also being challenged in court.

Today’s ruling also could affect the city of Chicago’s ongoing phase-out of retiree health insurance subsidies, a program Mayor Rahm Emanuel was counting on to save millions of dollars a year, as well as legislation recently approved to modify the pension plans of city workers and laborers.

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