- Bank of America Securities was the top underwriter of municipals in 2021, capturing 13.6% of the market. Citi ranked second with 9.91%, followed by JP Morgan with 7.82%.
- US municipal issuance surged to an all-time high last year, and some predict even more significant sales in 2022.
- Puerto Rico's government and the Fiscal Oversight Management Board agreed to negotiate police and teacher pensions, removing another obstacle to the island's historic bankruptcy proceedings. In a statement last week, the oversight board said the two sides agreed to hammer out "enhanced retirement benefits" for police within 60 days and teachers within 120 days.
- Investors seeking shelter from rising rates in 2022 should look to housing bonds, according to JPMorgan Chase & Co.'s lead municipal strategist. Debt issued by states to finance low-interest loans for first-time homebuyers or build affordable housing carry higher yields and is less volatile. Hence, they typically perform better than other municipal sectors when rates rise, said Peter DeGroot, the bank's head of municipal research and strategy. According to JPMorgan, housing bonds rated AA, and A provide an average extra yield of 11 to 35 basis points over similarly rated revenue bonds to compensate for uncertainty about how quickly homeowners will pay off their mortgages and because investors demand a premium for liquidity. Housing bonds are subject to "extraordinary redemption" calls even if there are no stated calls. This continuously callable feature is something to keep in mind when buying this sector. Housing bonds are also typically called at par or a very slight premium, thus affecting your actual return on investment.
- Visible supply begins the week at $3.5 billion, well below the 2021 average of $11.4 billion.
- The State of Texas collected a total of $3.6B in sales taxes for December, 24.4% more than 2020.
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