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MuniNet provides commentary and analysis relating to municipal bonds and their fundamental credit issues. From an investor perspective, we provide you with daily AAA yield levels on tax-exempt municipal bonds courtesy of Standard & Poor’s Securities Evaluations, Inc….
Daily Municipal Bonds Yields June 19, 2019
- Tax-Exempt AAA Non-callable S&P Yield Curve Recap (based on representative indices) at the close of day on June 19, 2019, compared to the previous market day.
- Municipal bond yield levels saw very little changes from the previous day across the maturity indices of the yield curve.
- The first few shorter maturity indices are the only ones that saw change. The six-month, one-year, two-year, and three-year maturity indices each lost one basis point in yield.
- The rest of the maturity indices in the chart above saw no change.
- Non-callable municipal bonds normally carry lower yields on maturity bonds than non-callable ones reflecting the likelihood that investors anticipate principal repayment on the called bonds prior to the stated maturity. (Optional redemptions usually apply to municipal bonds with maturities of ten years or more).
Source: © 2006 Standard & Poor’s Securities Evaluations, Inc., a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved. Information has been obtained from sources believed to be reliable. However, Standard & Poor’s and MuniNet LLC shall not be liable for any claims or losses of any nature in connection with information contained in this document, including but not limited to, lost profits or punitive or consequential damages, even if it is advised of the possibility of same. All references to municipal bonds or information related thereto is for informational purposes only. It is general in nature and based on matters or authorities that are considered reliable but not guaranteed or verified by MUNINET LLC.
Featured Bond: $231 Million Texas Children’s Hospital – Harris County Cultural Education Facilities Finance Corporation Hospital Revenue Bonds
Featured Bond – Week of June 17, 2019: Harris County Cultural Education Facilities Finance Corporation $231 Million in Hospital Revenue Bonds (Texas Children’s Hospital)
The Harris County Cultural Education Facilities Finance Corporation is issuing $231 Million in Hospital Revenue bonds for Texas Children’s Hospital. The bonds are broken into Series 2019A bonds of $151.7 million and Series 2019B bonds of $79.5 million. The bonds are being sold through negotiated sale with pricing during the week of June 17th.
Ratings are Aa2, AA, and AA from Moody’s, S&P, and Fitch, respectively.
About Texas Children’s Hospital & The Bonds
Texas Children’s, a Texas nonprofit corporation, is the largest pediatric integrated delivery system in the country. It’s been ranked #4 in the 2018-2019 U.S. News Best Children’s Hospitals rankings. The hospital has an academic affiliation with Baylor College of Medicine. The hospital operates in both Houston and Austin. Texas Children’s encompasses 40% of the Texas population.
Growth in Public Higher Education Debt Outstanding Outpaces All Other Major Municipal Bond Sectors
Public Higher Education Debt Outstanding Has Grown by Over 80% Since 2007 Leading All Other Major Municipal Bond Credit Sectors
by Richard A. Ciccarone
Municipal Bond Credit Sectors — Ten Year Outstanding Debt Trend
Based on municipal bond credit sector medians, Public Higher Education and Community Colleges registered the biggest increases in long term debt outstanding — more than any other major credit sectors observed in the municipal bond market during the period 2007- 2017. Universities and colleges saw a ten year growth of 85.2%, the most of all major municipal bond sectors tracked by Merritt Research Services LLC, an independent municipal data and research company that tracks financial conditions on over 10,000 municipal bond borrowers. Long term debt attributed to Community colleges followed close behind with an 80.7% growth rate. The ten year time span used in the comparison included the Great Recession as well as the subsequent recovery years.
Higher education institutions, in general, have incurred higher debt loads for capital improvement programs over the past two decades, triggered by a “keeping up with Jones’” mentality that swept the board rooms of college administrations. The wave of more expansive and luxurious campus facilities at competing colleges and universities was motivated in part on the grounds that the shrinking pool of eligible college age potential students required them to provide state of the art facilities. Private higher education institutions, many of which started their capital programs earlier than public institutions, ranked fifth in their median debt expansion with a smaller but still robust 39.6% growth rate.
EMMA – Electronic Municipal Market Access
Official online MRSB repository providing free public access to official disclosures, trade data and other information on the municipal securities market.
Merritt Research Services: Benchmark Central
Merritt Research Services provides benchmark median values for municipal credit analysis across 13 different sectors. Freely available and updated regularly.
Governmental Accounting Standards Board (GASB)
Independent organization that establishes and improves standards of accounting and financial reporting for U.S. state and local government.
The Bond Buyer
Established in 1891, an independent paid-subscription information resource of news, analysis and data serving 40,000+ in the municipal finance community.
A municipal bond new issue official statement (prospectus) service. MuniOS, a division of ImageMaster Inc, makes available preliminary and final documents. Official statements are provided by region and state.
IRS Tax-Exempt Bond Statistics
Includes data on tax-exempt "public purpose" (Governmental) and "private-activity" bonds, with statistical tables and Statistics of Income Bulletins.
What Are Municipal Bonds? - Investor.gov
What Are Municipal Bonds?What are municipal bonds? Municipal bonds (or “munis” for short) are debt securities issued by states, cities, counties and other governmental entities to fund day-to-day obligations and to finance capital projects such as building schools, highways or sewer systems. By purchasing municipal bonds, you are in effect lending money to the bond issuer in exchange for a promise of regular interest payments, usually semi-annually, and the return of the original investment, or “principal". An excellent primer on municipal bonds, particularly from an investors perspective. Answering these questions: Where Can Investors Find Information About Municipal Bonds? What Are Some Of The Risks Of Investing In Municipal Bonds? In Addition To The Risks, What Other Factors Should You Consider When Investing In Municipal Bonds?