Municipal Bond News

•          Weekly mortgage applications continue to fall.  This will have an adverse impact on the equity markets and should have a positive impact on our markets. With the slight rise in rates, application volume fell 2.50% while overall volume is 2.00% lower than last week.

•          Some see DC as a growing risk, primary due to the SALT which have current revenue forecasts lower than previous year, the ongoing trade war between US and China, and the most recent Government shutdown along with housing prices down.

•          Rahm Emanuel (Chicago mayor) has won plaudits form bond investors for raising taxes and fees to boost contributions to the pension system over the past few years.

•          PR is looking to make 6B of bonds “null and void” on their GO debt.  In a board meeting Monday this week, PR is asking a judge to declare the debt invalid, this would deliver a major hit to the holders of the bonds, and rock the MUNI market if this can be done.

•          NY Mayor de Blasio proposed a 100MM plan that would provide affordable healthcare to all.

• Ballooning health care costs continue to plague smaller cities and hospitals.  Many cities are issuing bonds to simply cover the medical bills from the hospitals form patients that cannot pay.

Detroit saw little BK penalty as it sold debt on Tuesday 12/4/2018.  Bonds were offered at 3.36% on 2020 maturities and 4.95% on 2038 maturities, this is tighter than what was initially anticipated.