2Q 2013 STAT BOOK AUG. 1, 2013 MUNICIPAL MARKET <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< SPONSORED BY Change comes at the margin, and in municipals during the second quarter of 2013 this meant certain issuers deciding not to honor their full faith and credit general obligations. States and municipalities borrowed less as interest rates rose. The Story of the Year, the Detroit bankruptcy, was waiting in the wings.
Change comes at the margin, and in municipals during the second quarter of 2013 this meant certain issuers deciding not to honor their full faith and credit general obligations. States and municipalities borrowed less as interest rates rose. The Story of the Year, the Detroit bankruptcy, was waiting in the wings.
QUARTER IN REvIEwThe most disturbing news of the second quarter was that certain municipalities, and even one state’s lawmakers, were having second thoughts about paying their general obligation debt. Page 2
ThE RATIoYields soared after Fed chair-man Bernanke said that the Fed would begin to curtail its monthly bond-buying program. Tax-exempts yielded 100%-plus of Treasuries. Page 4
YIELDS CLIMBBenchmark 10-year AAA municipal-bond yields surged to 2.78 percent at the end of the second quarter from 2 percent at the beginning of the period, the big-gest jump since the three months through December 2010. Yields reached 2.96 percent on June 25, the highest since April 2011. Page 4
voLUME FLAgSStates and municipalities sold $188.4 billion in long- and short-term securities during the first half, down 11 percent from the $211.1 billion they sold during the same period in 2012. Just over 3 percent was insured. Page 5
BY ThE BILLIoNIssuers sold four issues of $2 billion-plus and nine of at least $1 bil-lion during the first half. Page 5
who’S #1?Bank of America Merrill Lynch was the top under-writer in 11 states, followed by JPMorgan, which led in nine. Fifteen different underwiters took the top spot somewhere in the market. Page 6
ThE wINNER ISBank of America Merrill Lynch was the top under-writer over all. The top 10
firms accounted for more than 70 percent of the bonds sold during the half. Page 8
SPREADS ShRINkUnderwriting spreads fell to $5.34 per $1,000 bond, down from $5.84 in 2012. North Dakota paid the most, New Jersey the least. Page 9
PERFoRMANCE REvIEwDuring the worst quarterly rout since 2010, tobacco and housing debt were the only two segments to lose less than 2 percent, according to data from Barclays Plc. Page 10
RoCkY RoADIssuers defaulted on almost $7 billion in munis during the first half. There were only three Chapter 9 filings, none of them for what is com-monly considered a mu-nicipality. Detroit came later. Page 11
CoNTENTS
SECoND QUARTER IN REvIEwIt used to be that a GO was a GO was a
GO. Investors took the municipal general obligation full faith and credit pledge to mean just that: A municipality promised to do everything in its power to pay its debt.
Even in the unlikely event of a bank-ruptcy, municipalities would pay their GO debt, although, as many bond lawyers pointed out, such debt usually wasn’t tied to a specific stream of revenue, like, for example, water and sewer bonds.
This was a tradition. Investors relied on tradition, on market convention, and so states and municipalities borrowing money on their GO pledge did so on the cheapest terms.
During the second quarter of 2013, it became apparent that the GO pledge, “sacrosanct,’’ and “inviolable’’ as many analysts deemed it, wasn’t quite all it was cracked up to be. If it wasn’t secured to a particular stream of cash, sorry, bondhold-
ers, please join the unsecured creditors at the end of the line.
There were exceptions, of course; in Muniland, there always are. Some states say specifically that GO bondholders have a statutory lien on taxes. Some lawyers insist that a GO bond by its very nature is secured by the tax base.
What was starting to become apparent to many analysts, investors and students of the market was that some munici-palities in bankruptcy, some in financial distress (Harrisburg, Pennsylvania, and Detroit, which hadn’t yet declared bank-ruptcy) and some just because they were having second thoughts (the state of Rhode Island) either intended not to pay their GO debt in full or were thinking about it.
This realization may have profound ef-fects on ratings, analysis and investment.
The other thing that became apparent
during the second quarter was that all good things must come to an end, includ-ing the Fed’s easy money policy. In June, Fed chairman Ben S. Bernanke said those days were not far off. Interest rates shot higher, and the ratio of tax-exempt to Treasury yields lodged over 100 percent. Analysts lowered their forecasts for 2013’s bond sales as opportunities for issuers to refinance outstanding debt dwindled.
The Story of the Year lay somewhat in the future. The housing recovery ac-celerated, the high-yield muni market seemed to revive, a bridge in Washington collapsed signalling the inevitable hand-wringing over the nation’s crumbling in-frastructure should begin anew. Meredith Whitney’s long-awaited book, ‘Fate of the States’ was published.
In July, Detroit filed the largest ever Chapter 9 municipal banbkruptcy.
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The Ratio Surges After Bernanke Says End of Bond Buying in Sight
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The 10-year muni-Treasury ratio ended the second quarter of 2013 close to where it started — about 107 percent. The slump intensified after Fed Chair-man Ben S. Bernanke made comments during the penultimate week of June that the central bank planned to slow bond-buying this year and end purchases in mid-2014 if the economy improves. The average ratio since 2001 is about 93 percent, though in the past two years the figure has averaged 102 percent.
— Brian Chappatta
Benchmark 10-year AAA yields surged to 2.78 percent at the end of the second quarter from 2 percent at the beginning of the period, the biggest jump since the three months through December 2010. Yields reached 2.96 percent on June 25, the highest since April 2011. The day before, institutional bondholders put the most munis up for sale since at least 1996. Individuals pulled about $4.5 billion from mutual funds in the week through June 26, the most since at least 1992, when Lipper US Fund Flows data begins. The 10-year yield fell to as low as 1.76 percent on May 2 before climbing to 2013 highs by the end of the month.
— Brian Chappatta
Muni-Treasury Ratio Ends Where it Started in 2Q
10-Year Muni Yields Surge in Worst Quarter Since 2010
07.31.13 www.bloombergbriefs.com Bloomberg Brief | Municipal Market 4
States, Localities Sold $188 Billion in Both Long and Short-Term Securities During First half
0
10
20
30
40
50
60
Jan Feb March April May June
Billi
ons
2012 2013
Source: Bloomberg
States and municipalities sold $188.4 bil-lion in short- and long-term securities, both fixed- and variable-rate, during the first half of 2013, down 11 percent from the $211.1 billion they sold during the same period in 2012. Issuance flagged in June after Fed chairman Ben S. Bernanke said the Fed would begin to phase out its easing policy later in the year and interest rates soared.
--Joe Mysak
Issuance Fell After Rates Rose
ISSUE STATE SALE DATE Book RUNNINg LEAD MANAgER(S) SALE
METhoDDEAL SIzE
($MILLIoNS) BLooMBERg MARkET SECToR
California-Various Purpose CA 4/8/2013 Bank of America Merrill Negotiated 2,630 General Obligation
California-Various Purpose CA 3/11/13 JP Morgan/Goldman Negotiated 2,472 General Obligation
New Jersey Econ Dev Auth-Sch Facs NJ 1/21/13 Bank of America Merrill Negotiated 2,253 Appropriations
New York City Transitional Finance NY 3/18/13 Wells Fargo/Citigroup Negotiated 1,001 Income Tax
Los Angeles County-TRANS CA 6/3/2013 Goldman Negotiated 1,000 General Obligation
New York City NY 2/25/13 Morgan Stanley/JP Morgan Competitive 973 General Obligation
Missouri Hgr Ed Loan MO 5/22/13 Morgan Stanley Negotiated 956 Student Loans
Pennsylvania PA 4/3/2013 Bank of America Merrill Competitive 950 General Obligation
New York City NY 5/20/2013 Bank of America Merrill Negotiated 949 General Obligation
New Jersey Transportation NJ 4/15/2013 Goldman Negotiated 877 Appropriations
New York State Urban Dev NY 3/11/13 Wells Fargo/JP Morgan Negotiated 843 Income Tax
Rutgers State Univ NJ 6/10/2013 Morgan Stanley Negotiated 827 Higher Education
Source: Bloomberg
Largest Debt Issuances First half 2013
07.31.13 www.bloombergbriefs.com Bloomberg Brief | Municipal Market 5
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UNDERwRITERS
who’s Number 1 Underwriter? BofA Merrill is Tops in 11 States, JPM in 9The following table shows the top underwriter in the 50 states, District of Columbia, and Guam. The figures are calculated upon all
long-term debt issued in 2013 based on dated date, both fixed- and variable-rate, negotiated and competitive, with full credit given to the lead manager. The results show that Bank of America Merrill Lynch was the top underwriter in 11 states, followed by JPMorgan in nine and Citigroup in six. Fifteen different firms took the top spot somewhere in the municipal market.
— Joe Mysak
STATE UNDERwRITER ISSUANCE ($MILLIoNS)
% oF ISSUANCE IN STATE
STATE UNDERwRITER ISSUANCE ($MILLIoNS)
% oF ISSUANCE IN STATE
STATE UNDERwRITER ISSUANCE ($MILLIoNS)
% oF ISSUANCE IN STATE
CA Total 26,744 1 Bk of America Merrill 5,171 192 Jp Morgan 4,170 163 piper Jaffray 2,657 10NY Total 15,955 1 Citigroup 2,488 162 Wells Fargo 2,066 133 Jp Morgan 1,920 12TX Total 15,918 1 JP Morgan 2,307 142 Citigroup 1,916 123 raymond James 1,495 9NJ Total 8,576 1 Bk of America Merrill 2,992 352 Jp Morgan 1,400 163 Citigroup 1,203 14FL Total 7,150 1 Barclays 2,066 292 Citigroup 1,112 163 Wells Fargo 916 13oh Total 6,951 1 JP Morgan 1,390 202 barclays 1,204 173 Stifel 779 11PA Total 5,987 1 RBC Capital 1,277 212 bank of America Merrill 1,228 213 barclays 700 12IL Total 5,819 1 JP Morgan 1,015 172 bank of America Merrill 862 153 barclays 636 11NC Total 4,899 1 Bk of America Merrill 1,747 362 Wells Fargo 1,157 243 Citigroup 659 13vA Total 4,618 1 Citigroup 1,274 282 Jp Morgan 1,154 253 bank of America Merrill 497 11
wA Total 4,171 1 Citigroup 934 222 Jp Morgan 879 213 d.A. davidson 538 13Az Total 3,905 1 JP Morgan 895 232 bank of America Merrill 778 203 rbC Capital 679 17wI Total 3,792 1 JP Morgan 867 232 Morgan Stanley 615 163 robert W. baird 429 11MA Total 3,760 1 Bk of America Merrill 1,153 312 Jp Morgan 668 183 Morgan Stanley 644 17MD Total 3,594 1 JP Morgan 1,214 342 Citigroup 1,156 323 bank of America Merrill 948 26Co Total 2,902 1 RBC Capital 1,256 432 Morgan Stanley 403 143 George K. baum 271 9Mo Total 2,898 1 Morgan Stanley 956 332 George K. baum 397 143 piper Jaffray 327 11IN Total 2,694 1 City Securities 791 292 bank of America Merrill 779 293 Wells Fargo 163 6MI Total 2,633 1 Stifel 561 212 Fifth Third 458 173 bank of America Merrill 366 14oR Total 2,590 1 Citigroup 784 302 Seattle-northwest 397 153 Morgan Stanley 325 13
gA Total 2,533 1 Bk of America Merrill 636 252 Jp Morgan 573 233 robert W. baird 272 11LA Total 2,503 1 Raymond James 614 252 bank of America Merrill 453 183 Jp Morgan 315 13IA Total 2,315 1 Citigroup 1,207 522 robert W. baird 192 83 piper Jaffray 161 7TN Total 2,224 1 Raymond James 415 192 Goldman Sachs 375 173 Morgan Stanley 303 14SC Total 2,158 1 Wells Fargo 414 192 Jp Morgan 353 163 rbC Capital 324 15kY Total 2,059 1 Bk of America Merrill 788 382 Citigroup 386 193 robert W. baird 244 12MN Total 2,013 1 RBC Capital 377 192 piper Jaffray 291 143 northland 206 10CT Total 1,727 1 Citigroup 428 252 Wells Fargo 173 103 bank of America Merrill 173 10ok Total 1,674 1 Bk of America Merrill 463 282 rbC Capital 212 133 bosc 171 10AL Total 1,333 1 Bk of America Merrill 377 282 Merchant Capital 185 143 raymond James 152 11
continued next page
07.31.13 www.bloombergbriefs.com Bloomberg Brief | Municipal Market 6
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STATE UNDERwRITER ISSUANCE ($MILLIoNS)
% oF ISSUANCE IN STATE
STATE UNDERwRITER ISSUANCE ($MILLIoNS)
% oF ISSUANCE IN STATE
STATE UNDERwRITER ISSUANCE ($MILLIoNS)
% oF ISSUANCE IN STATE
kS Total 1,004 1 Piper Jaffray 269 272 robert W. baird 125 123 oppenheimer 96 10Nv Total 975 1 Morgan Stanley 219 222 Citigroup 196 203 rbC Capital 165 17NM Total 975 1 Bk of America Merrill 268 272 William blair 137 143 robert W. baird 134 14Ak Total 908 1 Stephens 445 492 Morgan Stanley 112 123 Crews & Associates 111 12UT Total 852 1 JP Morgan 312 372 Zions 123 143 Wells Fargo 106 12NE Total 786 1 Ameritas 298 382 d.A. davidson 140 183 Jp Morgan 100 13DE Total 734 1 JP Morgan 225 312 Morgan Stanley 206 283 bank of America Merrill 111 15
MS Total 713 1 Morgan Stanley 226 322 rice Financial 191 273 duncan Williams 108 15ME Total 685 1 Raymond James 215 312 bank of America Merrill 145 213 Citigroup 95 14RI Total 672 1 Raymond James 241 362 bank of America Merrill 204 303 Janney Montgomery 98 15Ak Total 621 1 RBC Capital 254 412 Citigroup 162 263 Keybanc 87 14vT Total 422 1 Morgan Stanley 378 902 rbC Capital 18 43 bank of America Merrill 16 4SD Total 406 1 Barclays 170 422 dougherty 109 273 bank of America Merrill 67 17wv Total 389 1 Wells Fargo 211 542 piper Jaffray 58 153 Crews & Associates 47 12
MT Total 386 1 JP Morgan 162 422 d.A. davidson 124 323 rbC Capital 73 19Nh Total 311 1 George K. Baum 124 402 rbC Capital 45 143 robert W. baird 35 11DC Total 195 1 RBC Capital 108 552 Morgan Stanley 87 45ND Total 171 1 Robert W. Baird 74 432 dougherty 47 273 First Southwest 33 19wY Total 140 1 Bk of America Merrill 87 622 Wells Fargo 27 193 George K. baum 21 15hI Total 125 1 Bk of America Merrill 99 792 Morgan Stanley 26 21ID Total 105 1 Barclays 36 342 George K. baum 31 303 Municipal Capital 18 17gU Total 23 1 Barclays 23 100
Source: Bloomberg Numbers run as of July 29,2013
Excludes derivatives & notes, full credit to bookrunning manager, based on dated date
UNDERwRITERS
what state offers the best value in the municipal market? mbm <
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07.31.13 www.bloombergbriefs.com Bloomberg Brief | Municipal Market 7
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UNDERwRITERS
Q1-Q2 2013 PoSITIoN UNDERwRITER ISSUANCE ($BILLIoNS) % ISSUANCE1 Bank of America Merrill 25.70 15.32 JP Morgan 22.22 13.23 Citigroup 17.60 10.54 Morgan Stanley 9.83 5.85 RBC Capital 9.63 5.76 Wells Fargo 9.36 5.67 Barclays 9.34 5.58 Piper Jaffray 6.14 3.69 Raymond James 5.58 3.3
10 Robert W. Baird 5.20 3.1Total 168.30
*excludes derivatives & notes, full credit to bookrunning manager, based on dated date
Top 10 Underwriters Q1-Q2 2013 ($billions) Numbers run as of July 24 2013
Q1-Q2 2013 PoSITIoN UNDERwRITER ISSUANCE ($BILLIoNS) % ISSUANCE1 Bank of America Merrill 8.17 21.82 Citigroup 5.48 14.63 JP Morgan 5.00 13.34 Robert W. Baird 2.86 7.65 Wells Fargo 2.84 7.66 Raymond James 1.27 3.47 Piper Jaffray 1.16 3.18 Hutchinson Shockey 0.99 2.69 Morgan Stanley 0.91 2.4
10 Janney Montgomery 0.91 2.4Total 37.54
*excludes derivatives & notes, full credit to bookrunning manager, based on dated date
Top 10 Competitive Underwriters Q1-Q2 2013 ($billions) Numbers run as of July 24 2013
Q1-Q2 2013 PoSITIoN UNDERwRITER ISSUANCE ($BILLIoNS) % ISSUANCE1 Bank of America Merrill 17.53 13.42 JP Morgan 17.22 13.23 Citigroup 12.12 9.34 RBC Capital 9.11 7.05 Barclays 8.94 6.86 Morgan Stanley 8.92 6.87 Wells Fargo 6.52 5.08 Piper Jaffray 4.98 3.89 Stifel Nicolaus 4.85 3.7
10 Goldman 4.39 3.4Total 130.76
*excludes derivatives & notes, full credit to bookrunning manager, based on dated date Source: Bloomberg
Top 10 Negotiated Underwriters Q2 2013 ($billions) Numbers run as of July 24 2013
07.31.13 www.bloombergbriefs.com Bloomberg Brief | Municipal Market 8
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UNDERwRITERS
The Average Cost of Municipal Underwriting: $5.34 a BondThe map shows the average cost of bond issuance by state, using the cost of issuance/underwriter discount disclosed in official statements, weighted by transaction size and expressed as a percentage. Translated into dollars and cents, the data show that New Jersey issuers paid the least to sell bonds, $25,800 per $10 million borrowed, or $2.58 per $1,000 bond. It cost North Dakota issuers the most to tap the market, an average of almost $200,000 to sell the same $10 million in bonds.The average underwriting cost across the entire municipal market was $5.34 per $1,000 bond. The information on underwriting costs was collected from long-term transactions sold during the second quarter of 2013.
STATE STATE CoDE
ISSUANCE voLUME
($MILLIoNS)
CoST oF ISSUANCE
%STATE STATE
CoDE
ISSUANCE voLUME
($MILLIoNS)
CoST oF ISSUANCE
%STATE STATE
CoDE
ISSUANCE voLUME
($MILLIoNS)
CoST oF ISSUANCE
%
2Q 2013 State-by-State Cost of Issuance Excludes Derivatives, Notes
Source: Bloomberg Numbers run as of July 24, 2013
Source: Bloomberg
07.31.13 www.bloombergbriefs.com Bloomberg Brief | Municipal Market 9
California CA 14,274 0.482Texas TX 9,553 0.551New York NY 6,832 0.533New Jersey NJ 5,074 0.258Illinois IL 4,489 0.418Florida FL 3,971 0.554Ohio OH 3,509 0.459Pennsylvania PA 3,146 0.551Virginia VA 2,948 0.364Wisconsin WI 2,388 0.508Massachusetts MA 2,170 0.347Missouri MO 2,091 0.557Iowa IA 2,000 1.333Washington WA 1,877 0.499Arizona AZ 1,873 0.729Maryland MD 1,722 0.451North Carolina NC 1,674 0.519
Colorado CO 1,608 0.572Louisiana LA 1,593 0.624Tennessee TN 1,506 0.601Indiana IN 1,489 0.702Michigan MI 1,487 0.499South Carolina SC 1,380 0.428Georgia GA 1,321 0.442Minnesota MN 1,024 0.907Oregon OR 980 0.470Alabama AL 960 0.766Kentucky KY 947 0.837Nevada NV 898 0.365Oklahoma OK 880 0.556New Mexico NM 853 0.415Connecticut CT 688 0.471Utah UT 674 0.399Kansas KS 596 0.981
Nebraska NE 542 0.913Mississippi MS 535 0.814Arkansas AR 496 0.835Vermont VT 422 0.617Rhode Island RI 388 0.496Maine ME 350 0.666Montana MT 315 0.682Delaware DE 302 0.505New Hampshire NH 223 0.527Alaska AK 173 0.428South Dakota SD 164 0.743West Virginia WV 156 0.999Wyoming WY 128 0.822District of Columbia DC 87 -Idaho ID 83 1.022North Dakota ND 78 1.989Total US 92,917 0.534
1 2 3 4 5 6 7 8 9 10 11 12
INvESToRS
TICkER NAME MANAgEMENT CoMPANY 2ND
QUARTER oF 2013
ASSETS EXPENSE RATIo
MgMT FEE
ATOIX US Alpine Ultra Short Tax Optimized Income Fund Alpine Woods Capital Investors 0.13 1,417 0.65 0.75
ORSYX US Oppenheimer Rochester Short Term Fund Muni Fund OppenheimerFunds -0.02 407 0.63 0.5
MUISX US BMO Ultra Short Tax Free BMO Asset Management -0.06 830 0.3 0.2
FMUSX US Federated Municipal Ultrashort Fund Federated Investment Management -0.11 3,543 0.53 0.4
WSBIX US Wells Fargo Advantage Short-Term Municipal Bond Fund Wells Fargo Funds Management LLC -0.12 5,642 0.4 0.3
DFSMX US DFA Short-Term Municipal Bond Portfolio DFA Dimensional Funds -0.16 1,647 0.22 0.2WSTMX US Wells Fargo Advantage Short-Term Municipal Bond Fund Wells Fargo Funds Management LLC -0.17 5,642 0.6 0.3SUMAX US SEI Tax Exempt Trust Short Duration Municipal Fund SEI Investments Management Corp -0.26 965 0.64 0.33
FMLCX US Fidelity Municipal Income 2015 Fund Fidelity Management & Research/USA -0.26 80 0.65 0.3
Source: Bloomberg
TICkER NAME MANAgEMENT CoMPANY 2ND
QUARTER oF 2013
ASSETS EXPENSE RATIo
MgMT FEE
DFCMX US DFA California Short Term Municipal Bond Portfolio DFA Dimension Funds -0.33 457 0.23 0.2
HICOX US Colorado BondShares -- A Tax-Exempt Fund Freedom Funds Management Co -0.39 908 0.58 0.5
PCDIX US PIMCO California Short Duration Municipal Income Fund Pacific Investment Management Co LLC -0.44 207 0.33 0.33
SDCMX US Bernstein Short Duration California Municipal Portfolio Alliance Bernstein LP -0.57 87 0.67 0.45
SCTIX US Wells Fargo Advantage California Limited-Term Tax-Free Fund Wells Fargo Funds Management LLC -0.64 578 0.6 0.35
SDNYX US Bernstein Short Duration New York Municipal Portfolio Alliance Bernstein LP -0.66 103 0.64 0.45
CCSTX US Capital Group California Short-Term Municipal Fund Capital Guardian Trust Co -1.02 0.05 0.4 0.35
PTFSX US Pacific Capital Tax-Free Short Intermediate Securities Fund Boston Advisors LLLC -1.17 57 0.25 0.2
FCSTX US Fidelity California Short Intermediate Tax Free Bond Fund Fidelity Management & Research Co -1.2 751 0.35 0.37
ALABX US Williamsburg Investment Trust Alabama Tax-Free Bond Fund Leavell Investment Management Inc -1.33 33 0.65 0.35
Source: Bloomberg
Mutual Fund Performance — National open End Funds
Mutual Fund Performance — Single State open End Funds
Tobacco, housing Did Best During First half Market Rout
-5% -4% -3% -2% -1% 0%
IDR/PCR
Water and Sewer
Transportation
Education
Hospital
Special Tax
Leasing
Local G.O.
OVERALL INDEX
State G.O.
Resource Recovery
Electric
Housing
Tobacco
Sect
or
Tobacco, Housing Lose the Least During 2Q Market Rout
Total Return
Source: Barclays Plc.
During the worst quarterly rout since 2010, tobacco and housing debt were the only two segments to lose less than 2 percent, according to Barclays Plc. To-bacco has outperformed “because every-body has been reinvesting their big turbo payments,’’ said Lyle Fitterer, head of tax-exempt fixed income for Wells Capital Management, which oversees about $34 billion in munis. State GOs, the worst per-former in 2012, lost 2.9 percent, less than the overall index’s 3 percent decline. “In this kind of market, people would rather have high quality than lower quality,” said Hugh McGuirk, head of municipal invest-ments at T. Rowe Price Group Inc., which oversees about $20 billion of munis.
— Brian Chappatta
Tobacco, Housing Lose the Least During 2Q Market Rout
07.31.13 www.bloombergbriefs.com Bloomberg Brief | Municipal Market 10
1 2 3 4 5 6 7 8 9 10 11 12
INvESToRS
Fewer Deals, More Dollars, Defaulted During First half
First half was Quiet for Municipal Bankruptcies. Biggest of All was to Come in 3Q
There were 20 issues in both monetary and technical default totaling $6.96 billion during the first half of 2013, according to Richard Lehmann of the Distressed Debt Securities Newsletter. The number of is-sues was down from the 85 deals that de-faulted during the first half of 2012, but up from the $2.7 billion in dollar amount that defaulted at the time. “Detroit is, of course, the big story here with $6.446 billion in bond debt outstanding,’’ Lehmann wrote. In all of 2012, there were 156 issues in default of $4.8 billion in debt.
--Joe Mysak
The first half of 2013 saw only three Chapter 9 municipal bankruptcies, two hospitals and a Nebraska sanitary district, according to James Spiotto, bankruptcy expert and partner at Chapman & Cutler LLP in Chicago. On July 1, an Arkansas improvement district filed. The biggest bankruptcy of all was filed on Thursday, July 18, by the city of Detroit. For all of 2012, there were 12 Chapter 9 filings, down from the 18-year high of 13 in 2011.
--Joe Mysak
is municipal bond supply meeting demand in your state?mbm <g
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07.31.13 www.bloombergbriefs.com Bloomberg Brief | Municipal Market 11
1 2 3 4 5 6 7 8 9 10 11 12
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Assured GuarantyFile: 4635_Commitment
MysakQ2StatInsertion: July 22, 2013
Due: July 17,2013Size: 7.5'' X 8.8”
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07.31.13 www.bloombergbriefs.com Bloomberg Brief | Municipal Market 12
