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Municipal Bonds

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Muninet Guide 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 S&P Securities Evaluation, Inc….

Daily Municipal Bonds Yields  November 19, 2018

municipal bond yields

    Tax-Exempt AAA Non-callable S&P Yield Curve Recap (based on representative indices) at the close of day on  November 19, 2018 compared to the previous market day.
  • Municipal bond yields were unchanged for the six-month, one-year and five-year bond. yields declined.
  • Yields on the two-year,  three-year,  seven-year, 10-year, 25-year and 30-year maturities declined by one basis point.
  • The 15-year and 20-year maturities declined by two basis points.

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 Municipal Bond Issue, Week of November 12, 2018:   City of Philadelphia, PA Water and Wastewater Revenue Bonds Series 2018 A — $275 Million 

This week, MuniNet features  the City of Philadelphia.  On or around November 15th, The City intends to issue by negotiated sale a total of  $275,085,000 Water and Wastewater Revenue Bonds.  The Series 2018 bonds are to be used to finance capital improvement of the city’s  Water and Wastewater Systems, to make any necessary deposits to the debt service reserve fund and pay the costs of issuance for the bonds.  The bonds being sold are rated A1 by Moody’s,  A+ by S&P and A+ by Fitch.  The bonds are being sold by underwritten by a negotiated group led by Citigroup and Siebert Cisneros Shank & Co., LLC.  The sale is expected to occur during the week of November 12, 2018  subject, in part, to market conditions.

The bonds will be special obligations of the City secured by a pledge of and security interest in all project revenues as detailed in the prospectus derived from the city’s water and wastewater systems on an equal basis with the City’s outstanding water and wastewater revenue bonds (other than subordinated bonds, of which there are currently none outstanding).     They  are not payable from the city’s tax or general revenues of the city, nor are they a general obligation of the city, and neither the full faith and credit or taxing power of the city is pledged.   The city has covenanted to bondholders that it will pledge to establish rates and revenues in each fiscal year at least equal to 1.2 x the debt service requirement for each fiscal year.

Continue Article and Read further coverage and analysis 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 EducationDebt 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 than any other credit sectors that borrow 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.

In the case of community colleges, expansion programs heated up as public officials  responded to the demand for lower cost institutions available for families seeking a lower cost option to either reduce the cost leading to a four year degree or a path providing more specific job preparation and training..

On the other side of the debt trend scale, wholesale electric agencies,  also called joint action agencies,  whose primary purpose is to generate or jointly purchase power on behalf of or to resell to mostly local municipal utilities,  saw their outstanding debt loads fall by 23.8% over the past ten years,  the biggest percent drop among all the major credit sectors tracked Merritt database.  Public power borrowers, which also include retail electric utilities, have seen their debt loads and new capital outlay requirements shrink in line with greater reliance on smaller, less expensive generating plants,  more  purchased power from surplus suppliers and conservation efforts.   Since 2007, retail municipal electric utilities lowered their median long term debt outstanding by 5.4%.

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.


    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? -

    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?