Q&A: ‘We could see another onslaught of issuance,’ says Guggenheim’s Pass
Jim Pass, a Chicagobased managing director at Guggenheim Partners, which oversees about $8.5 billion of munis, discussed the threat of tax-reform and the increasing risk of non-appropriation for debt service with Municipal Market’s Brian Chappatta.
Q: Are you concerned about the talk from Washington about changing the tax-exempt status of municipal bonds?
A: It’s something we think about, but at the same time we have to get through the election first and see who wins. At that time, we may see greater issuance just like we saw in 1985, as well as we saw with the BAB program in the fall of 2010, when the supply of Build America Bonds overwhelmed demand. When we know what the proposals may be, and if they get more momentum, we could see another onslaught of issuance. That could possibly happen in the first quarter or sometime in 2013.