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Municipal Bonds

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  • a daily update of the Municipal Bond AAA Non-Callable Yield Curve,  
  • the Weekly Featured Bond and MuniNet’s Top Pick Websites on Municipal Bonds.   
  • Click here for the Weekly municipal bond calendar.

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 April 22, 2019


municipal bond yield chart

Source: S&P Evaluations, Inc. Municipal bond Non-callable AAA-rated yields by key maturities on April 22, 2019.


    Tax-Exempt AAA Non-callable S&P Yield Curve Recap (based on representative indices) at the close of day on April 22, 2019, compared to the previous market day.
    • Note: No new yields reported on Friday April 19. The previous day refers to Thursday April 18.
    • Municipal bond yield levels trended slightly downwards as compared to the previous day across some non-callable key benchmark maturity indices.
    • The 30-year maturity index saw the most change with a loss of two basis points in yield.
    • The 25-year, 20-year, and 15-year maturity indices each lost one basis point in yield.
    • The rest of the 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.

 




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Featured Bond: $240 Million University of Connecticut General Obligation Bonds

Main Quad of The University of Connecticut

Photo courtesy of goodfreephotos.com

Featured Bond – Week of April 22, 2019: The University of Connecticut $240 Million in General Obligation Bonds

Overview

The University of Connecticut is scheduled to issue $240 Million in General Obligation Bonds. The Bonds are authorized pursuant of the University of Connecticut 2000 Act. The Act establishes that the University can borrow money in its own name on behalf of the State in order to fund a special capital improvement program known as the “UConn 2000 Infrastructure Program”.

The Bonds are negotiated and have a current pricing date of April 24.  Moody’s rates the Bonds A1, and S&P assigns a rating of A+.

About the UConn 2000 Infrastructure Project & the Purpose of the Bonds

The UConn 2000 Infrastructure Program, or UConn 2000 for short, is established by the University of Connecticut 2000 Act to modernize, rehabilitate, and expand the University grounds. The Act, originally adopted in 1995, provides for a 23-year capital budget program that occurs in three phases. The estimated total cost is $4,619,300,000.

For the full article with a statistical snapshot of financial measures, click here.


Fiscal Year 2017 Municipal Bond Audit Times Are Still Too Slow

Municipal Bond Audit Times Show Slight Improvement Since 2015 But Most Still Late to the Table  —  The County, State and City Sectors are the Least Timely

By Richard A. Ciccarone

Municipal bond analysts and investors are accustomed to waiting a lot longer for municipal bond financial audits to be completed after the close of the fiscal year than they would on a corporate bond.   While public corporations are required to file an annual audit within 60 to 90 days after the close of the year, municipal bond borrowers often finish their audited annual reports in close to twice that time and a large number take even much longer.

While investors need the audit documents for credit evaluation and securities pricing purposes, they are not the only stakeholders that have a need to see timely audited financial reports. Governing boards associated with public bodies and not-for-profit organizations need to review the audits in order to fulfill their duty for proper oversight.  Like municipal bond analysts and investors, they are better able to respond to issues disclosed in an audit if the documents are timelier.  Although this issue has been lingering for decades,  the time it takes to complete and sign an audit after the fiscal year has been completed hasn’t changed much over the last ten years.

For Full Article, click here


Growth in Public Higher Education Debt Outstanding Outpaces All Other Major Municipal Bond Sectors

municipal bond credit sectors 10 year debt trend

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.

See full article, click here






Top Picks
The following featured links are approved by MuniNet as exceptional online resources offering up-to-date information on topics that matter
  • 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.

  • MuniOS.com

    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?