MuniLand

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for July 7, 2014:

Muniland think pieces:

 

 

 

Huge news from the Illinois Supreme Court:

Closing the door on the first half of 2014

U.S. Censys Bureau

The first half of 2014 was positive for muniland after a very tough 2013, but weak spots still remain.

Muniland relies on state and local government revenues, which were up slightly for the first quarter. Early indications suggest that the second quarter will also be up (though personal income taxes were off more than expected). The Census Bureau reported that first quarter 2014 tax revenues for four state and local government tax categories increased 2.4 percent to $295.7 billion from $288.7 billion in 2013.

Some states are lagging on the revenue front. The Rockefeller Institute, which tracks state revenues, found seven states that had revenue come in significantly below budget in April:  Kansas, Rhode Island, Vermont, Ohio, Mississippi, Arizona and West Virginia. California revenues weakened in May, but year-to-date they still exceed projections by $1.8 billion, or 2.1 percent. It will take about 45 days until a complete revenue picture is available for the first half.

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for July 3, 2014:

Macro economic stories:

 

The MSRB’s former Deputy Executive Director Ernie Lanza tweets his farewell to the market overseer:

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for July 2, 2014:

Happy fifth birthday for MSRB’s EMMA!

A new fiscal year and new budgets. Let the analysis begin!

 

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for July 1, 2014:

New Dodd-Frank rules for municipal advisers are finally rolled out to winnow the municipal adviser universe:

Puerto Rico’s whirling inferno of news

The news flow from Puerto Rico has become a whirling inferno since the government passed legislation last week to allow some of the Commonwealth’s public corporations to default.

Here are four important points for investors in Puerto Rico bonds:

1. The market is awaiting official confirmation that Puerto Rico’s teetering electric utility PREPA has made its $204 million bond payment due July 1. If made, it will relieve short-term pressure on Puerto Rico, but the intentions for restructuring are still unknown. Attention will turn to PREPA’s $660 million outstanding lines of credit with Citibank and Scotiabank that need to be renewed.

2. The credit rating agencies are finally catching up with the market and have been raining downgrades and watch alerts on Puerto Rico and its public corporations. At this point these downgrades are somewhat irrelevant, since Puerto Rico bonds are selling at junk yields and investors are more interested in possible recovery values.

Questions about the Port Authority’s toll hike

The New York Times has chronicled the SEC’s investigation into whether New Jersey Governor Chris Christie forced the New York/New Jersey Port Authority to pay for $1.8 billion in improvements to the Pulaski skyway without properly disclosing it to bondholders. Allegedly, Christie’s rationale was that the Pulaski was an “access” road leading to a Port Authority tunnel. It appears that Christie’s Port Authority lieutenants were scheming to radically raise tolls to pay for it.

The New Jersey Record reported (emphasis mine):

Years before they resigned amid a scandal over politically motivated lane closures at the George Washington Bridge, Governor Christie’s top two executives at the Port Authority led a secretive campaign to quickly push through controversial toll hikes on the Hudson River bridges and tunnels by drowning out criticism, limiting public input and portraying the governors of New York and New Jersey as fiscal hawks who reined in an out-of-control agency.

At its heart was a plan to have the Port Authority, an independent bi-state agency, propose an enormous toll hike — a $6 increase that would bring the E-Z Pass toll to $14 by 2014 — so that the governors could then scale it back. The smaller increases that were ultimately approved in 2011 — $4.50 over four years — allowed both governors to claim credit while they set the stage for each state to claim hundreds of millions of dollars to fund pet projects not directly related to the Port Authority.

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for June 30, 2014:

Excellent Reuters Insider video of last week’s events in muniland:

The Federal Reserve Bank of New York examines what happens to bank holdings of municipal bonds when states enact pension reform. It’s all good.

Best of muniland on Twitter

Here are the best tweets with the #muniland hashtag for June 27, 2014:

 

 

Puerto Rico ring fences its public corporation debt

Puerto Rico

In a dazzling effort, Puerto Rico Governor Alejandro Garcia Padilla presented legislation to restructure the debt of several public corporations. Both the Puerto Rico Senate and House approved the measure and pushed it to conference where statutes require that it be reconciled by the end of the legislative session on June 30. Seldom have financial markets seen such an elegantly choreographed approach to haircutting sovereign debt.

For months, Padilla has promised a balanced budget for fiscal year 2015, which begins July 1. He maintained that no government employees would be laid off (although contract workers might be). The Commonwealth’s $9.6 billion general fund budget had enormous deficits. By severing the fund from the deficits of Puerto Rico’s public corporations, the general fund will be relieved from financing about $800 million a year. Caribbean Business reported:

Over the past year, the GDB has reiterated that the public debt of the commonwealth should not be seen as a sum of debts to a single debtor, but rather as individual loans supported by various sources of revenues and income, with certain priorities established by law or contract. The officials said the GDB’s message to the market has been consistent in the sense that neither the commonwealth nor the GDB is in the position to subsidize or bail out public corporations and that they need to become self-sufficient.

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