In 2008, words like turmoil and crisis became closely associated with financial headlines, and the ripple effect clearly took hold of the financial sector, including the municipal bond industry.
This was the first year in its hundred-year history that the industry’s leading trade publication has published a timeline. “We felt that it was a year of such dramatic change in the market that a timeline would be a good tool to keep track of it,” says Amy Resnick, The Bond Buyer’s Editor-in-Chief.
Resnick points to the following events as being particularly influential during 2008:
- the overall contraction in the ranks of national underwriters, highlighted by the acquisition of Bear Stearns by JPMorgan, the Lehman bankruptcy, and the purchase of Merrill Lynch by Bank of America;
- the decision by investment banks to stop supporting auction rate securities;
- the exit of UBS from municipal underwriting;
- the drastic change in availability of capital and underwriting support; and
- the vast reduction in overall liquidity.
“These events, the drastic drop in ratings for bond insurers and the overall decrease in insured penetration changed the landscape for municipal bonds dramatically, making it much harder for lower-rated issuers to sell bonds,” she says.
While The Bond Buyer is a subscription-based publication, the timeline is available free of charge to all visitors – subscribers and non-subscribers alike. It will be accessible via The Bond Buyer’s home page for at least the next few weeks.