Municipal Markets >>>

    California Yield Penalty Shrinks to 75 Bps

    California debt is poised to extend its biggest rally in at least 18 years as Governor Jerry Brown curbs borrowing and pushes for tax increases to plug deficits. The extra yield over top-rated municipal bonds that investors demand to own 10- year securities of the most-populous U.S. state and its localities is set to fall for a fifth straight quarter. That’s [...]

    More Chapter 9 Filings Seen

    California may see more Chapter 9 municipal bankruptcies than the three that have been filed since June, according to Controller John Chiang. Municipal budgets already strained by surging pension costs and declining real-estate tax revenue were stripped of more than $1 billion in local redevelopment funds and vehicle-license fees to cut California’s deficit. Stockton, San Bernardino and Mammoth Lakes filed for bankruptcy in [...]

    Teachers End Chicago Strike

    Chicago teachers did more yesterday than end the city’s first school strike in 25 years. Union delegates quelled an outbreak of labor unrest in President Barack Obama’s hometown with seven weeks to go before the presidential election. Delegates, who soundly refused to suspend their walkout two days earlier, voted overwhelmingly to reverse themselves yesterday, sending 350,000 students back to class. “It was [...]

    Suffolk County, N.Y., Pays Up as Finances Flag

    New York’s Suffolk County, home of the Hamptons beach towns, is paying twice as big a penalty to borrow than it did a year ago, even after budget analysts cut its projected deficit in half. The 86-mile stretch of eastern Long Island, where billionaires George Soros and John Paulson own estates, may face a $179 million gap through next year, according to the [...]

    Safety Produces Slim Returns

    Municipal bonds backed by revenue from essential services such as electricity and water are in their biggest slump since 2009 as the Fed’s stimulus policies discourage investors from buying safer assets. Electric-utility debt has gained 4.1 percent this year, and water and sewer bonds have returned 4.7 percent, Barclays Plc indexes show. That makes them the two worst-performing types of revenue securities, [...]

    Harvard Looks to Timber to Boost Endowment

    Jane Mendillo, who took over as head of Harvard University’s $32 billion endowment four years ago, is still searching for an edge. While Harvard has recouped about half of the $10 billion it lost after global financial markets collapsed in 2008, Stanford, Columbia and Princeton universities have been posting bigger gains. Colleges are preparing to report modest returns for the year [...]

    BABs Returns Beat Treasuries

    Build America Bonds, orphaned after Congress failed to extend the program in 2010, are on a pace to beat Treasuries and tax-exempts for a third straight year. Created by President Barack Obama’s 2009 economic stimulus, the taxable bonds have earned 8.3 percent this year through Sept. 12, compared with 1.7 percent for federal debt and 5.8 percent for [...]

    Princeton Endowment Projected to Rise Less Than 5%

    Princeton University’s endowment probably earned zero to 5 percent on its investments in the past fiscal year, according to President Shirley Tilghman. The Ivy League school is expected to release returns for the year ended June 30 by next month. The endowment returned 22 percent in fiscal 2011, and 15 percent in the prior period. [...]

    Cities Mark Fiscal Gain

    U.S. cities are recovering from the recession even as they continue to face pressure from sliding property tax revenue, state budget cuts and rising employee costs, according to a report. Fifty-seven percent of cities say they were “better able to meet financial needs’’ this year than in 2011, according to an annual survey by the National League of Cities released yesterday. It [...]

    Detroit Agency Paid Up to Terminate Rate Swaps

    JPMorgan Chase & Co. stood to gain more than just its share of $7.8 million in fees by helping Detroit’s water and sewer agency issue new debt after the city staved off insolvency. The department’s $659.8 million June bond sale let it pay more than $300 million to banks, including JPMorgan, to end interest-rate swaps while raising its borrowing cost. The utility, with [...]

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