Muniland investors have been anticipating strong demand for new bonds being brought to market. Issuance has dropped dramatically, and generally this would create strong demand for new bonds. Massachusetts brought a bond deal yesterday that had a higher yield and lower amount than was anticipated. This is surprising since Massachusetts is a state with many high-income earners. Dow Jones reported:
The Commonwealth of Massachusetts on Tuesday sold a $ 469.8 million offering of general obligation municipal bonds via lead underwriter J.P. Morgan.
The deal size was $20 million smaller than initially planned. Randy Smolik, senior municipal analyst at Thomson Reuters, said the bonds came at yields that were slightly higher than expected, which raises questions about demand at a time of few new issues, and as muni bond funds prepare for a semi-annual period when coupon income necessitates reinvestment.
“If the deal isn’t being very responsive at these levels… it kind of tells me that June money isn’t that anxious to invest at these levels,” Smolik said.
State auditor is blowing the whistle pension shortfall
This is the first time I’ve seen a public official issue a paid press release to discuss a problem in his state: