- NJ will replenish an emergency savings account that has been empty since 2008; this furthers the evidence that SALT issue continues to "do well" for states like NJ. I suspect that if this SALT issue continues, you will see upgrades by rating agencies based on the overall funding going into the balance sheets of the states.
- Some traders say the MUNI bond rally, w
Municipal Bond News
- The prices of MUNI's are nearing record highs against T bills, and this is fueling the debate over whether they have run too far. CITI believes that these prices are "unsustainable" and are a direct result of funds flowing into funds since the start of the year. However, MSCO indicated that it is possible for MUNI's to rise further; still, I believe we
- Understanding what the “pledge of revenue” is from MUNI’s is the backbone of the market. PR tried to undermine this pledge last week when it asked the courts to “strike down” the pledge that it had on its GO and revenue debt. The courts refused to do so and as discussed last week PR paper rallied on the news.
• PR has hired an independent 3rd party to make distributions to its bondholders after restructuring. This is an overall good thing, and will give the bondholders confidence that the money is being overseen by someone else other than PR. This will be a FED official who helped manage the recovery efforts.