The municipal bond industry is complex, and encompasses many areas of sub-specialties, from investment banking to bond insurance to public finance – and more.
And whether you are a seasoned professional or a novice investor, many factors have led to significant changes in the industry over the past twenty years.
Enter The The Handbook of Municipal Bonds, a comprehensive guide to the municipal bond market.
Its 1,300+ pages are brimming with information on a wide variety of related topics, from state and local government finance, to the role of the bond attorney, and credit sector analysis to Chapter 9 municipal bankruptcy.
This edition of the Handbook replaces the two-volume book that Feldstein co-edited in 1982. Since then, the industry has changed in many ways, including the increase in buy-side participants, new methodologies employed in fixed income analytics, changing compliance issues, the introduction of synthetic instruments (swaps, derivatives, etc.), improved pricing transparency and disclosure, and the current challenges facing the bond insurers.
Senior Editor Sylvan Feldstein, Director of Municipal Bond Research in the investment department of Guardian Life Insurance Company of America, says that The Handbook took over two years to compile.
“We crafted the book to be as comprehensive as possible,” he says. Its 70+ chapters were written by highly regarded industry professionals. “My co-editor, Frank Fabozzi, and I were very fortunate to have recognized experts in their specialties contribute to the Handbook.”
The book also features more than 20 case studies, spotlighting significant and/or noteworthy municipal events, trends, and innovations. Examples include:
- New York Yankees vs. Mets “Subway Series” Financing of New Stadiums
- Florida’s Seminole Indian Tribe becoming a taxable entity
- New York City’s use of taxable municipal bond issuance for budget Relief and Affordable Housing after 9/11
- Superbowl XXXII Helps Resolve Bond Default
Of particular note is the book’s first appendix, which provides a pictorial history of municipal bonds. The bonds in the photos come from Feldstein’s and co-editor Fabozzi’s respective personal collections. “Many are quite rare and usually seen in museums,” according to Feldstein.
The book’s second appendix includes a glossary of terms.
Feldstein points to the rise and fall of the monoline bond insurers as one of the three factors having the greatest impact on the municipal bond industry over the past twenty years. “For 19 ½ years, they made credit analysis less important,” he explains. “In the last six months, their downgrades have pushed credit analysis back to the forefront.”
A second factor has been the number of new buyers in the municipal marketplace, including arbs, crossover and foreign institutions.
The increased use of portfolio performance measurements, credit default swaps, tender option bonds, collateralized debt obligations – all explained in the book – have also left a significant mark on the industry.
The Handbook of Municipal Bonds has relevance for issuers, bankers, traders, researchers, attorneys, investors – just about anyone with an interest in the municipal marketplace. Feldstein calls the book “truly a reference work.” In the book’s foreword, Christopher “Kit” Taylor, former Executive Director of the Municipal Securities Rulemaking Board from 1978-2007, says, “The Handbook of Municipal Bonds meets a critical need in filling the information demands of (the municipal) market.”