Monday

March 28, 2016

www.bloombergbriefs.com

 

Bloomberg AAA Benchmark Yields

DESCRIPTION CURRENT PREVIOUS NET CHANGE

BVAL Muni Benchmark 1T 0.62 0.61 +0.02

BVAL Muni Benchmark 2T 0.76 0.76 0

BVAL Muni Benchmark 3T 0.92 0.89 +0.03

BVAL Muni Benchmark 4T 1.06 1.06 0

BVAL Muni Benchmark 5T 1.19 1.21 -0.02

BVAL Muni Benchmark 6T 1.32 1.32 +0.01

BVAL Muni Benchmark 7T 1.46 1.47 -0.01

BVAL Muni Benchmark 8T 1.61 1.63 -0.02

BVAL Muni Benchmark 9T 1.71 1.72 -0.01

BVAL Muni Benchmark 10T 1.83 1.82 +0.01

BVAL Muni Benchmark 20T 2.44 2.43 0

BVAL Muni Benchmark 30T 2.73 2.71 +0.02Source:    GBY<GO>, GC I493 <GO>

Top Court Dashes Chicago’s Pension OverhaulBY MARGARET CRONIN FISK, ELIZABETH CAMPBELL AND JANAN HANNA, BLOOMBERG NEWS

Chicago’s plan to ease its $20 billion public-worker pension deficit was ruled illegal by the Illinois Supreme Court, a decision that the city warned may lead to the funds’ running out of money and worsen its financial strains.

The Chicago plan, passed in 2014, violates the Illinois Constitution, which bars the diminishing of public pensions, the court said Thursday. The finding upholds a lower court decision from July and follows a similar ruling by the Illinois Supreme Court last May preventing changes to the state’s pension funds.

The city shortchanged its pensions over the last decade, creating a shortfall that’s left it with a lower rating than any big U.S. city except Detroit. Its projected annual payment of $886 million this year to its four retirement funds is more than twice what it was a decade ago, spurring officials to adopt a record property-tax increase.

The ruling in the Chicago case impairs Mayor ’s efforts to pare a Rahm Emanueldeficit that threatens the city’s solvency. The defeat leaves officials racing to devise new ways to shore up retirement system, though it will also save money in the short term because the overhaul required the city to boost contributions to its municipal and laborers funds. The two cover about 60,000 workers and retirees.

The court’s ruling comes almost 11 months after it unanimously struck down a 2013 law to alter Illinois’s retirement system, saying the changes to solve the state’s $111 billion pension shortfall violated constitutional protections of workers’ benefits. That holding led Moody’s to cut Chicago’s rating to junk in May.

Moody’s, which has a negative outlook on Chicago’s Ba1 rating, one step below investment grade, said it would continue to assess its plans to fix pensions in the wake of the ruling. “Chicago’s unfunded pension liabilities are among the highest of any municipality Moody’s rates” relative to revenue, the company said in an e-mailed statement Thursday. “Absent substantial budgetary adjustments, Chicago’s pension debt will grow for many years and, along with the court invalidating the savings achieved with the city’s reform, will continue to drive the city’s fixed costs higher.”

STATE YIELD SPREAD TO AAA CHANGE

CA 2.09 27 +0.02

FL 2.06 24 +0.02

IL 3.59 177 +0.03

NY 1.96 14 +0.01

PA 2.51 69 +0.03

TX 2.07 25 +0.01

MUNICIPALITY AMOUNT

Fairfax County VA $134 million Rev

Houston ISD TX $684 million GO

Pennsylvania Turnpike $205 million Rev

Palm Beach County FL $127 million Rev

California State University $1.4 billion RevSource: Bloomberg CDRA <GO>

AMOUNT OUTSTANDING

($MLNS)

MATURING NEXT 30

DAYS ($MLNS)

ANNOUNCED CALLS NEXT 30 DAYS ($MLNS)

3,542,744 8,597 7,422Source: MBM<GO>

BENCHMARK STATES 10-YEAR

PRIMARY FIXED RATE

30-Day Supply Fixed: $7.9 Bln (LT)30-Day Supply Fixed: $327 Mln (ST)Sold YTD Fixed: $63.6 Bln (Neg LT)Sold YTD Fixed: $20.4 Bln (Comp LT)Sold YTD Fixed: $4.1 Bln (ST)

SECONDARY MARKET

MSRB: $13.3 BlnPICK: $14.8 Bln

VARIABLE RATE

SIFMA Muni Swap Rate: 0.29%Bloomberg Weekly AAA Rate: 0.307% Bloomberg Weekly AA Rate: 0.338% Daily Reset Inventory: $228 Mln  Weekly Reset Inventory: $4.6 Bln  

IN THE PIPELINE

SIZE OF MARKET

SUPPLY & DEMAND

March 28, 2016 Bloomberg Brief Municipal Market 2

 

SUPPLY & DEMANDMunicipal Yields Fall in Rally Driven by Broad-Based Demand From Inflows

Municipal bond investors added cash to mutual funds for the 25th straight week, and added cash to funds invested across the yield curve, pushing the weekly average yield down to 1.83 percent.

Investors added $901.1 million to funds that report weekly to Lipper U.S. Fund Flows in the week ended March 23, the highest in six weeks. Long-term funds that report weekly to Lipper saw $643.8 million of net cash, the highest in four weeks. Intermediate funds saw $258.5 million of cash; high-yield funds reported $273 million of inflows, both the highest in six weeks.

Meanwhile, issuers sold the lightest amount of debt in the week ended March 23 — $7.6 billion, the least in five weeks. That helped push down the weekly average 10-year municipal yield four basis points from last week's 1.87 percent.

— Taylor Riggs, Bloomberg Radio

DIARY

Michigan Approves Short-Term Fix to Keep Detroit's Schools OpenBY ELIZABETH CAMPBELL AND DARRELL PRESTON, BLOOMBERG NEWS

Detroit’s public schools are poised to receive a financial rescue from Michigan after the legislature approved $48.7 million of emergency funding to keep the distressed district from closing as early as next month.

Lawmakers in the Senate voted Thursday to approve the measure to avert a shutdown, which could have jeopardized aid the cash-strapped school system uses to cover bond payments.

The House, which authorized the funding previously, then voted to concur with the Senate’s changes to the bill, which give the emergency manager oversight of the funds, and if that manager is removed, the state’s financial review commission would manage the district’s finances, said ,Amber McCann

spokeswoman for Senate Majority Leader .Arlan Meekhof

“This is emergency aid to meet immediate payroll and operational expenses through the end of the school year,” McCann said in an e-mail.

Governor has praised the Rick Snyder plan, even as he calls for a more long-term fix for a district that’s been run by a state-appointed emergency manager since 2009.

While Detroit emerged from its record municipal bankruptcy in 2014, the school system is still flirting with insolvency. Decades of population decline ravaged the schools as enrollment plunged 65 percent plunge since 2006.

The emergency cash ensures that schools can remain open through the end of the current school year, according to , a Michelle Zdrodowskispokeswoman

for the district. Without the authority to borrow money to stay afloat, the district was set to run out of cash.

Standard & Poor’s earlier this month put some of the school’s bonds on watch for a downgrade, saying that a decision to close early could cause the state to withhold aid that backs the securities.

The funds, which come from the state’s tobacco settlement fund, is only a temporary fix, according to , Al Pscholkachairman of the House appropriations committee.

   Earlier last week, the Senate approved a plan to restructure the district by splitting the school system in two with the old district paying off $515 million of debt and $200 million of transition costs with existing property taxes and the new district taking over operations of the schools.

ACCORDING TO

Flows, Supply, Yields

March 28, 2016 Bloomberg Brief Municipal Market 3

ACCORDING TO

Payrolls rose in 36 states in February and the unemployment rate dropped in 22, a sign labor market slack is gradually diminishing in the U.S. economy.

California led the nation with an almost 40,000 increase in employment, followed by a 25,100 advance in New York, according to figures from the Labor Department. Jobless rates in New Hampshire and South Dakota were the lowest in the nation at 2.7 percent.

“People are not getting laid off at a sharp clip right now, hiring seems to be rock solid,” said , chief Stephen Stanleyeconomist at Amherst Pierpont Securities LLC in New York. “In the labor market, everything is good.”

New Hampshire and Hawaii showed the biggest percentage gain in employment with 0.7 percent increases, followed by

Payrolls Climb in 36 States Arkansas and Utah at 0.5 percent. States where payrolls declined included North Dakota, Iowa and Delaware.

The biggest decrease in the unemployment rate occurred in Tennessee, where joblessness fell by 0.5 percentage point to 4.9 percent in February. Wyoming showed the largest statistically significant increase, with the rate climbing to 5 percent from 4.7 percent.

Alaska had the nation’s highest unemployment rate in February, at 6.6 percent.

State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, thus making the national figures more reliable, according to the U.S.

Bureau of Labor Statistics.That report showed payrolls across the

U.S. climbed by 242,000 in February after a 172,000 increase that was bigger than initially estimated. The unemployment rate held at an eight-year low of 4.9 percent, offering further proof that the labor market is tightening. The fly in the ointment remains growth in average hourly earnings, which climbed 2.2 percent in February from the year before, the least in seven months.

Federal Reserve policy makers are keeping an eye on how the U.S. economy weathers a global slowdown and financial-market volatility as they consider the timing of their next interest-rate increase. They held off on raising borrowing costs at a meeting in March.

— Victoria Stilwell and Michelle Jamrisko,

Bloomberg News

  

CREDIT CLOSE UP

March 28, 2016 Bloomberg Brief Municipal Market 4

CREDIT CLOSE UP

Wood-Pellet Mill Bankruptcy Burns Muni-Bond Funds Chasing YieldBY BRIAN CHAPPATTA, BLOOMBERG NEWS

Wood pellets are made to be burned. It turns out a Louisiana facility that was built to make the pieces for power plants is doing the same to bond investors.

Invesco Ltd., Waddell & Reed Financial Inc. and AllianceBernstein Holding LP are among buyers left in limbo after Louisiana Pellets Inc., a subsidiary of the world’s biggest pellet maker in Germany, filed for Chapter 11 bankruptcy last month. After selling almost $300 million in municipal debt since 2013, it defaulted on some taxable bonds on Jan. 1 because its facility in a small lumber town struggled to ramp up output to the levels projected in initial offering documents.

The project is the latest example of the risks associated with chasing yield in the portion of the municipal market that finances industrial-development projects, the segment most prone to default. Investors have had few opportunities to buy recently and a lot of money to work with: High-yield muni funds saw inflows in 93 of the 115 weeks since the start of 2014, Lipper US Fund Flows data show.

The wave of cash means “you have people jumping over themselves chasing incremental yield,” said , a John Bonnellfund manager who oversees about $10 billion of state and local-government debt at USAA Investment Management Co. in San Antonio. “There used to be a saying way back when: If something couldn’t get financed in the bank market or the corporate market or the equity market, it would get done in the muni market.”

Local authorities often issue debt for companies, hospitals and nonprofits, which back the obligations. While they often work with well-established borrowers, so-called conduits since 2014 have financed — or tried to finance — speculative projects including a sewage-to-fertilizer plant, a new home for USA Basketball and a methanol plant near Texas’s Gulf Coast that’s seeking to challenge foreign producers that dominate the business.

A Louisiana public authority issued $140 million of debt in November 2013 on behalf of the pellet company, which built a

facility in Urania, a lumber town of 1,300 about 245 miles northwest of New Orleans. Investors extracted a steep price to compensate for the risk: Partially tax-exempt securities due in 2039 paid 10.5 percent interest, or 6.4 percentage points more than AAA munis. Subsequent rounds of financing came through private placements in 2014 and 2015.

The pellets are made from wood residues like sawdust or shavings, which are then dried and compacted. Electricity producers burn the pieces, which are considered carbon-neutral, along with coal to comply with renewable-energy mandates.

Facing adverse weather and construction setbacks, the facility failed to meet production expectations. A sharp decline in the price of traditional energy sources like oil and natural gas added financial strain to the parent company, Wismar-based German Pellets, which

"This is one of those situations where as a

bondholder, we’re going to be working out the situation with

the borrower."— MARK PARIS, INVESCO

declared insolvency overseas last month.Invesco is the largest holder of

Louisiana Pellets debt, with about $89 million in its funds as of Dec. 31. The next biggest owner is Waddell & Reed, with $22.5 million, then AllianceBernstein with $18.5 million.

"The quickness of this project coming under scrutiny and into trouble is concerning to us, but it’s why you run a diverse portfolio,” said , who Mark Parisruns Invesco’s $7.7 billion high-yield muni fund. “This is one of those situations

 

where as a bondholder, we’re going to be working out the situation with the borrower. It’s probably not something we are going to try and sell out of.”

Michael Walls, who manages the $869 million Waddell & Reed Advisors Municipal High Income Fund, declined to comment, citing restrictions from being part of a group that agreed not to publicly discuss certain details of the project. The Louisiana Pellets bonds due in 2039 with a 10.5 percent interest rate are the second-largest holding in the fund.

“We believe that eventually the first phase of this plant can operate successfully — and have a new owner — but it is way too soon to know about expanding beyond that,” , Dean Lewallena senior high-yield municipal credit analyst at AllianceBernstein, said in an e-mail. “The near-term focus is to get it operating again.”

German Pellets began financing the plant in late 2013 when oil was still selling for about $100 for a barrel, compared with $40 now. Natural gas prices have been cut in half over the period.

The plant was supposed to produce 500,000 metric tons of pellets annually by operating at about 87 percent of capacity, according to offering documents from the 2013 sale. Instead, in the second half of 2015, it produced just 101,000.

German Pellets also borrowed $187 million in 2012 through a development agency in Sanger, Texas, for its first U.S. location, in Woodville, Texas. Invesco is the largest holder of those securities as well, with $39.6 million.

Unlike its Louisiana counterpart, the Texas plant is operating as expected, producing more in three months than the Urania facility did in twice the time.

Bloomberg News reporter Kate Smith talks to

Bloomberg News’s Brian Chappatta about this

article in our newest audio feature for the

municipal market: The Story Behind the Story.    

CREDIT CLOSE UP

March 28, 2016 Bloomberg Brief Municipal Market 5

CREDIT CLOSE UP

Puerto Rico's Delegate Demands Changes to Debt Crisis Draft BillBY BILLY HOUSE, BLOOMBERG NEWS

Speaker promised that Paul RyanHouse Republicans would have a plan to help Puerto Rico deal with its $70 billion debt by the end of March, yet some island officials are finding the emerging draft difficult to swallow.

They may have no choice.The bill being written would create a

five-member board that will hire experts to oversee a process for Puerto Rico to restructure its debts.

The board, which would also oversee management of the island’s finances, is modeled after one imposed in 1995 on the District of Columbia.

A draft version and summary of the bill is being circulated by the House Natural Resources Committee, which aims to post publicly a “discussion” draft by March 29. Ryan and the committee’s chairman, Representative Rob Bishopof Utah, plan formal action on the bill by Bishop’s panel in mid-April.

For Puerto Rico Governor Alejandro and other island officials, Garcia Padilla

handing over financial control to a federally appointed panel will be difficult. It represents a loss of autonomy and even humiliation. They instead have been pushing for something more like Chapter 9 protection under the U.S. Bankruptcy Code, which Puerto Rico is not eligible for and which many congressional Republican oppose.

Pedro Pierluisi, Puerto Rico’s Democratic delegate in Congress, is already raising concerns, saying he has several remaining conditions.

“If they are not met, the bill will not become law,” Pierluisi said in astatement on Saturday. “And, if a bill does not become law, Puerto Rico and its creditors will almost certainly go over a cliff —  together — this summer.”

Still, he couched his conditions with an insistence he can work to make modifications with his Republican and Democratic colleagues “to create a final product that is a net positive for the people of Puerto Rico.”

The Republicans drafting the bill are trying to find a middle ground between

their own caucus’s objections to anything that resembles a bailout or bankruptcy, and Puerto Rico’s demands for some control over its fiscal planning.

The bill, being written in consultation with the Treasury Department and House Democrats, contains elements that will be unpopular on Wall Street and with some Republicans. For instance, existing language would allow for the oversight board to petition a judge for a court-supervised restructuring, which would amount to a cram-down mechanism to force resistant investors to accept a deal.

Some of Pierluisi’s concerns, though, go to the very heart of the bill. For instance, he points to a section of the bill that says the board would be terminated once Puerto Rico has five consecutive years of balanced budgets. “I believe this is too long, and that three years is a more appropriate time frame,” he said.

He also notes the bill as drafted

"If a bill does not become law, Puerto Rico and its creditors will almost certainly

go over a cliff — together — this

summer."— REPRESENTATIVE PEDRO PIERLUISI

includes provisions taken verbatim from the 1995 law that created the independent board for the District of Columbia “that — in my view — give the board excessive, unnecessary and anti-democratic powers.”

Pierluisi said the draft would authorize the oversight board to make recommendations about ways to improve fiscal stability and then, if the Puerto Rican government doesn’t adopt the measures, authorizes the board to implement them “over the objections of

the Puerto Rico government.”“While I doubt the board would ever

exercise this power, it should not even have it,” Pierluisi said in his statement.

The D.C. panel had similar powers to override decisions by the mayor and city council. That control board ended ts oversight in 2001 after four straight years of balanced budgets and approved audits.

Pierluisi also raised objections to a section that would allow the board to appoint a chief management officer to oversee Puerto Rico’s government agencies, which he says “seems to cross the line from ‘macromanagement’ to ‘micromanagement.’” In addition, he said he’s focused on a section that would give the board a role in the government contracting process.

Still, Pierluisi emphasized that he intends to work with Bishop and Republicans “to get this bill in a position where it can become law.”

Padilla has warned the island may default May 1 on a $422 million debt payment unless the territory reaches an agreement with its creditors. Puerto Rico and its agencies face another $2 billion payment July 1.

Meanwhile, population losses are hitting every corner of the island. Puerto Rico is experiencing the largest out-migration in more than 50 years, according to aPew Research Center analysis released on March 24 of new county-level U.S. Census Bureau data.

The island is also dealing with a potentially devastating outbreak of the Zika virus, transmitted by mosquitoes. Padilla has requested federal help to deal with an outbreak that the Centers for Disease Control says could hit as much as 20 percent of the island’s population.

Pierluisi did not mention all of these concerns in his statement, but issued a veiled warning to officials in Puerto Rico.

“It is not constructive when certain political leaders in Puerto Rico support debt restructuring authority, but oppose the creation of an oversight board to instill fiscal discipline and improve government efficiency and transparency,” he said. “This is a completely unrealistic position.”

RESULTS OF SALES

March 28, 2016 Bloomberg Brief Municipal Market 6

Long-Term Bond Sales Results

SELLING DATE

ISSUE STATE RATING TAXAMT

($Mlns)1 YEAR 5 YEAR 10 YEAR 20 YEAR STATUS TYPE

SENIOR MANAGER

03/21 Houston   -Ref-A TX Aa3/AA/ N 557.625.000/1.

5705.000/2.

3704.000/3.

360Final Negt

Loop Capital Markets Llc

03/21Denver City&Co Ded Tax -A

COAa3e//AAe

N 242.502.000/1.

4505.000/2.

180Final Negt

Citigroup Global Mkts Inc

03/21Ky Turnpike Auth -A -Ref

KYAa2/AA-

/A+N 222.67

5.000/1.640

5.000/2.440

Final NegtMorgan Stanley & Co Llc

03/21Energy Northwest -Ref -A

WAAa1/AA-

/AAN 198.54

5.000/2.110

Final NegtBank Of America Merrill

03/21Energy Northwest -Ref -A

WAAa1/AA-

/AAN 195.53

5.000/1.550

Final NegtBank Of America Merrill

03/21 Pa Hsg Fin Agy   -Ref PA Aa2/AA+/ N 162.10.850/100.

0001.700/100.

0002.750/100.

0003.500/100.

000Final Negt

JP Morgan Securities Llc

03/21Denver City&Co-Txbl    -B

COAa3/AA-

/AAT 154.81

2.700/100.000

2.368/100.000

Final NegtCitigroup Global Mkts Inc

03/21 Nj St -Ref-Ser T NJ A2e/A/A N 131.335.000/1.

0005.000/2.

010Final Negt

Citigroup Global Mkts Inc

03/21Truckee Meadows Wtr Auth

NV Aa2/AA/ N 124.795.000/2.

910Final Negt

Morgan Stanley & Co Llc

03/24 11:00 North Hempstead -A NY Aa1e// N 13.862.000/0.

5502.000/1.

1502.000/1.

9503.000/3.

030Awarded Comp

Roosevelt & Cross Inc

*Moody's/S&P/Fitch

Most Active Bonds

DESCRIPTION STATE DATED COUPON MATURITY VOLUME PRICED AVERAGE YIELD AVERAGE NO. OF TRADES

Mesa Utl Sys-Ref AZ 04/06/16 4.000 07/01/32 50,230,000 108.695 3.006 36

Mesa Utl Sys-Ref AZ 04/06/16 4.000 07/01/31 41,975,000 109.223 2.949 23

Met Govt Nashville & TN 04/29/16 5.000 07/01/46 40,955,000 113.811 3.384 19

Fl Hsg Fin-1-Txbl-Ref FL 03/31/16 3.125 07/01/37 40,785,000 100.000 3.125 19

Houston-A-Ref TX 04/13/16 5.000 03/01/27 38,000,000 121.867 2.490 9

Houston-A-Ref TX 04/13/16 5.000 03/01/23 37,920,000 119.768 1.920 18

Broward Cnty Sch Bd-A FL 04/27/16 3.250 07/01/33 36,710,000 98.117 3.395 79

Houston-A-Ref TX 04/13/16 5.000 03/01/26 36,500,000 123.049 2.370 31

San Diego Transprtn-A CA 09/10/14 4.750 04/01/48 34,845,000 113.758 2.819 64

Houston-A-Ref TX 04/13/16 5.000 03/01/21 34,120,000 116.061 1.570 20

Tx A&M Univ-B-Txbl TX 04/12/16 4.113 05/15/45 29,235,000 101.132 3.976 21

RESULTS OF SALES

TRADING

KEY STATISTICS

March 28, 2016 Bloomberg Brief Municipal Market 7

 

KEY STATISTICSAnne Arundel County, Maryland, Borrows for Improvements, Refinancing 

Anne Arundel County, Maryland is selling $285.1 million in general obligation bonds on Wednesday at auction. The bonds will be issued in four different series for general improvement, water and sewer improvements, and refunding purposes. Located between the Chesapeake Bay and Washington D.C., Anne Arundel is the fifth largest jurisdiction in Maryland.

The county maintains a rainy day fund that has steadily improved from $17.2 million in fiscal 2011 to $51.4 million as of Dec. 31, 2015. In compliance with the county's property tax limitation, the 2016 property tax rate was reduced 2 cents to $0.9230 per $100 of assessed value. Concurrently, the income tax rate was reduced from 2.56 percent to 2.50 percent. Despite the tax cuts, the county projects their 2016 tax revenues to increase due to the improving economy and decreased unemployment.

— Karen Altamirano, Bloomberg Data

Anne Arundel County, Maryland: Key Statistics

Statistic Value

Total GO Debt Outstanding * $1,658.6 Million

Total GO Refunded Debt Outstanding* $60.85 Million

Most Recent Debt Underwritten By (sold 03/25/2015) Bank of America Merrill Lynch

Historical Cost of Issuance/Underwriter Discount for Issuer $3.18 per $1,000

Total General Fund Revenues $1,292.2 Million

General Fund Property Tax Revenues $623.9 Million

General Fund Income Tax Revenues $444.3 Million

YoY Total General Fund Revenue Growth 4.53%

YoY General Fund Operating Expense Growth 3.83%

Net Pension Liability $496.8 Million

Total Debt per Capita $3,292

Per Capita Personal Income $64,043

Total Population (2014) 560,133

Five-Year Population Growth (2009 to 2014) 7.47%Source: Bloomberg, BLS

*Financials are as of 6/30/15. Excludes derivatives; amount outstanding includes fully accreted maturity value of zero coupon bonds.

 

This story was written by a Bloomberg LP employee involved with data collection and was edited by the News Department. To suggest ideas or provide feedback, contact the editor for this story: Joe Mysak at jmysakjr@bloomberg.net.

BREAKING NEWSDetroit Bondholders to Wait Nearly a Year for Annual Financials    BY DARRELL PRESTON, BLOOMBERG NEWS

Detroit’s record bankruptcy hasn’t solved once financial problem that’s plagued the city for at least a decade: Getting its annual financial report done on time.

Mayor ’s administration Mike Dugganwill miss a March 31 deadline for releasing audited statements for the fiscal year that ended in June, the city said in a regulatory filing. The report is expected to be ready by May 31, the city said, because of holdups from the water and sewer department and library system.

Such delays are legion in the $3.7 trillion municipal market, especially when it comes to distressed borrowers at the greatest risk of defaulting. That’s in part

because the SEC has no direct power to crack down on governments that drag their feet in making routine disclosures, unless it finds evidence of fraud.

Municipal issuers “substantially lag” corporate borrowers when it comes to delivering timely financial reports, according to , Richard Ciccaronepresident of Merritt Research Services LLC who found that municipal audits typically don’t come out until about six months after the year ends. That’s three times longer than the deadline the SEC imposes on the largest corporations.

“Detroit isn’t the only one, but because the city is trying to rebuild it’s credibility in the market after going into bankruptcy, it’s important for them to keep their word,” said Ciccarone. “When they promise to do

something, it’s important for them to do that.”

Detroit hasn’t complied during the past five years “in all material respects with its obligations,” according to its bond documents when it borrowed $245 million as it emerged from bankruptcy in 2014.

“Now that it has exited bankruptcy the city expects to be in a position to file its annual updates at least within nine months after its fiscal year end going forward,” the city said in its bond documents.

That hasn’t happened yet. John Naglick, Detroit’s finance director, said in a statement that it’s alerting investors because “officials know we cannot make the 270 day time frame.”

CALENDAR — SCHEDULED SALES

March 28, 2016 Bloomberg Brief Municipal Market 8

CALENDAR — SCHEDULED SALES

SELLING ISSUE STATE AMT ($MLNS) TAX SENIOR MANAGER STATUS TYPE

03/28 HOUSTON ISD -A -REF TX 683.6 N JP Morgan Securities Llc Tue Negt

03/28 PENNSYLVANIA TPK COMM PA 204.685 N Morgan Stanley & Co Llc Wed Negt

03/28 TAMPA HLTH SYS       -A FL 200 N Morgan Stanley & Co Llc Tue Negt

03/28 HAWAII     SER FE    -REF HI 182.385 N Bank Of America Merrill Thur Negt

03/28 HAWAII -TXBL- SER FF- REF HI 137.165 T Bank Of America Merrill Thur Negt

03/28 FAIRFAX CO -SWR -REF VA 134.25 N JP Morgan Securities Llc Wed Negt

03/28 UNIV MN RGTS   -A MN 123.165 N Barclays Capital Inc Tue Negt

03/28 SAN FRANCISCO REDEV AGY S CA 85.275 N Stifel Nicolaus & Co Inc Thur Negt

03/28 CENTRE CO HOSP AUTH-A-REF PA 68.23 N Bank Of America Merrill Thur Negt

03/28 KY ECO DEV FIN AUTH    -A KY 64.465 N Bc Ziegler & Co Thur Negt

03/28 GRAND VLY ST UNIV BOT-REF MI 59.335 N Pnc Capital Markets Llc Wed Negt

03/28 SNOWLINE             -COP CA 58.125 N O'Connor & CO SECS INC Wed Negt

03/28 SAN FRANCISCO REDEV AGY S CA 45 N Stifel Nicolaus & Co Inc Thur Negt

03/28 KENTUCKY INFRA AUTH-REF-A KY 41.965 N Morgan Stanley & Co Llc Wed Negt

03/28 WESTERN CAROLINA UNIV-REF NC 36.455 N Raymond James & Assocs Wed Negt

03/28 CLEVELAND OH 32.86 N Morgan Stanley & Co Llc Thur Negt

03/28 MS UNIV              -REF MS 31.96 N Raymond James & Assocs Wed Negt

03/28 OLD BRIDGE TWP BOE   -REF NJ 31.025 N Roosevelt & Cross Inc Wed Negt

03/28 MARANA USD # 6       -B AZ 30 N Stifel Nicolaus & Co Inc Wed Negt

03/28 PIMA CO - COP -A  -REF AZ 28.775 N Rbc Capital Markets Llc Wed Negt

03/28 SCOTTSDALE USD #48-REF AZ 28.05 N Stifel Nicolaus & Co Inc Thur Negt

03/28 PRINCE GEORGES CO AUTH MD 28 N Stifel Nicolaus & Co Inc Wed Negt

03/28 ORLANDO SPL REV   -C FL 24.605 N Stifel Nicolaus & Co Inc Wed Negt

03/28 MCALLEN CTFS OBLIG-TXBL TX 24.5 T Jefferies Llc Day/Day Negt

03/28 NAMPA SD #131-REF ID 24.255 N Piper Jaffray & Co Wed Negt

03/28 BRAZOSPORT CLG DIST-REF TX 24.205 N Raymond James & Assocs Day/Day Negt

03/28 BOISE URBAN RENEWAL AGY ID 22.82 N US Bancorp Investments Wed Negt

03/29 11:00 CENTRL FL EXPWY AUTH -REF FL 154.665 N Comp

03/29 11:00 VIRGINIA PUB SCH AUTH-REF VA 148.895 N Comp

03/29 11:00 PALM BEACH CO -REF FL 126.645 N Comp

03/30 10:30 ANNE ARUNDEL CO MD 95.31 N Comp

03/29 11:30 MIICHIGAN ST         -A MI 87.2 N Comp

03/30 11:00 SUFFOLK     -REF  -A NY 85.055 N Comp

03/29 09:30 OKLAHOMA CITY OK 77.5 N Comp

03/30 11:00 ANNE ARUNDEL CO     -REF MD 74.505 N Comp

03/30 11:00 ANNE ARUNDEL CO   -REF MD 70.845 N Comp

03/29 11:00 JOPLIN SCHS      -REF MO 47.2 N Comp

03/30 10:30 ANNE ARUNDEL CO MD 44.47 N Comp

03/29 12:30 DUBLIN USD       -F CA 43.5 N Comp

03/29 10:30 MARYLAND DEPT OF TRANS MD 41.56 N Comp

03/30 11:00 MONTGOMERY CO MD 41.47 N Comp

TWEET OF THE DAY BY JOE MYSAK, BLOOMBERG BRIEF

March 28, 2016 Bloomberg Brief Municipal Market 9

 

Find Muni Data on the Bloomberg Terminal

DATA FREQUENCY ON THE TERMINAL

AAA Benchmark Valuation Daily GC I493 <GO>

Benchmark State Yields Daily MBM <GO>

VRDO Rates, Inventory Daily MBIX <GO>, ALLX BVRD <GO>

Upcoming Sales Daily CDRA <GO>

Volume, MSRB, PICK Daily SPLY <GO>, YTDM <GO>, MSRB <GO>, MBIX <GO>

Results of Sales Daily CDRA <GO>

Most Active Daily MSRB <GO>

Most Searched DES Every Wednesday SECF <GO>

Variable-Rate Calendar Every Thursday CDRV <GO>

Most Traded Borrowers Every Friday MFLO <GO>

Week-Ahead Calendar Every Monday CDRA <GO>

Supply and Demand Every Friday SPLY <GO>, BVMB <GO>

Muni Credit Risk Every Monday MRSK <GO>

TWEET OF THE DAY BY JOE MYSAK, BLOOMBERG BRIEF

Texas Comptroller Offers CABs LessonTexas Comptroller@txcomptroller

ICYMI: the costly funding option some Texas schools turn to in #FiscalNotes #tx

https://t.coed bit.ly/1Tqx81A/LfSH298qQ8Details

Texas Comptroller Glenn Hegartweets a link to an article in his office's publication, Fiscal Notes, which explains why certain school districts in the state use capital appreciation bonds, and the risks they hold.

 

  

 

 

 

 

Bloomberg Brief:Municipal Market

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