Month: July 2014

PREPA in the Crossfire – Webinar Replay Available

In case you missed it ... A webinar, featuring an independent panel discussion on the challenges, potential default, impending restructuring and outcomes for the Puerto Rico Electric and Power Authority (PREPA) took place on July 30.  Panelists included: Gary...

Muni Revenue Bonds: Lessons from Detroit and Puerto Rico

Market Outlook Geopolitical events are, first and foremost, human tragedies. So it’s only appropriate for us to start this week’s column by sending our thoughts and prayers to the victims from both sides of the Gaza conflict, as well as those unfortunate passengers of...

Detroit’s Bankruptcy Repudiation of COPs Defies History

Detroit’s repudiation of its COPs in bankruptcy is not supported by the history of government finance in the U.S. Repudiation of debt by states or local governments is not new, dating back as far as the early 1800’s. The lessons learned from that repudiation should not be forgotten.

Puerto Rico Goes on a Charm Offensive

Market Outlook The Treasury market continues to provide a reasonably stable backdrop to all fixed-income markets, with the 10-year bond still ensconced, as it has been for a while, in a 2.50-2.70% trading range. Fed Chairwoman Janet Yellen reiterated her low rate...

Munis Hit by Puerto Rico Fallout, Again

Market Outlook As we headed into the long holiday weekend, there was a definite feeling among muni market participants that the Puerto Rico (PR) crisis has now entered a critical new phase, and that the attendant uncertainty could once again derail all the positive...

Puerto Rico’s “Willingness to Pay” Issue

Muni investors were sitting on pins and needles Tuesday morning and it was not all about the outcome of the USA-Belgium World Cup match. Weighing on their minds was the question of whether or not, in the wake of last week’s events, PREPA would be making payment for the July 1st coupon on its debt. A non-payment, of course, would constitute the largest muni default to date, eclipsing the Detroit case. It would also send a clear message that PREPA intends to seek imminent relief under the new “bankruptcy law” for public corporations.

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