Municipal Bond News

• 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.

•    Powell speaks on 11/28/2018 about the “existing frameworks for financial stability.”  Trump continues to display his dissatisfaction in the current chairman as we move into the balance of this year with rising rates ahead of us.

•          S&P indicated that they might cut PG&E to junk in the next few months.  They are calling for an at least 50% downgrade based on the CA fires.  

•    Voters in AZ will be voting to save the state 275MM and help bail out two unfunded state regiment plans. 

•    Sales tax revenue from major cities soared in the 1st Q of 2018 and has continued through the year.

• Chicago Sales Tax bonds were downgraded to AA- with a stable outlook on 10/23/2018.

• Morningstar indicated that people should steer clear of Nuveen’s High Yield funds due to its “liberal use” of leverage.

• Atlantic City was upgraded two notches by S&P to B on 10/16/2018.  S&P indicated that this reflect their opinion of the city improved operating environment and structural financial improvement following the settlement of outstanding tax appeals and the continuation of extensive oversight. 

• Closed End Funds continue to get pounded in both NAV and net interest cost.  The discount between the share price and the underlying assets are averaging 11.1% as of 10/12/2018.