Bellwether for the Muni Bond Markets

[seanm123]

This has to be bad for the Muni or Government Bond Markets, when an agency like the NY/NJ Port Authority cannot find and underwriter.


Dec. 3 (Bloomberg) -- The Port Authority of New York and New Jersey received no bids from investment banks seeking to underwrite a taxable note offering that what would have been the largest deal of its kind in eight months.
The $300 million of three-year notes, backed by net revenue of the authority that operates airports, river crossings and transit in the New York City area, were up for competitive sale among underwriters at 11 a.m. New York time today. The debt carried the highest short-term ratings from Moody’s Investors Service, Standard & Poor’s and Fitch Ratings.
“The lack of bids will have no impact on any current Port Authority capital projects,” the bi-state agency said in a news release. “We are confident that the markets will recover in the upcoming year when we plan to return with another sale.”


http://www.bloomberg.com/apps/news?p...NYU&refer=home

[Starving Steve]

Re: Bellwether for the Muni Bond Markets

I have just received notice from my broker that a good chunk of my provincial bond portfolio in Canada may be called in the next 90 days. The bottomline is that I would be left without any interest income.

Can you believe these times? No income means no spending. And no spending means no lending because the banks won't lend to quiet and risky businesses. And no money circulating means falling prices. Tell that to the geniuses running the central banks.:rolleyes:

This panic began when Bernankee lowered interest rates, and the panic is accelerating into a whirlpool of deflation.

[zoog]

Re: Bellwether for the Muni Bond Markets

Hm, I wonder if Bill Gross is right or just hoping if he says it will happen they'll make it happen for him.:rolleyes:

SAN FRANCISCO (MarketWatch) -- Debt-ridden states and local governments are poised for a bailout under the incoming Obama administration, presenting a buying opportunity for downtrodden municipal bonds, Pimco founder Bill Gross said Thursday.

Gross, whose management of the world's largest bond fund has made his recommendations closely watched, said he anticipates that the White House under President-elect Barack Obama will "quickly be confronted by the need to provide those hundreds of billions of dollars to states and large municipalities."

The next administration isn't likely to let a big state like New York or California go bankrupt, he added.

"Municipal bonds then, selling at historically high ratios relative to U.S. Treasurys, offer attractive price-appreciation potential," Gross wrote in monthly commentary posted to the Web site of the Pacific Investment Management Co., known as Pimco.

Last week, two of Pimco's municipal bond funds postponed dividend payments, saying "continued severe market dislocations and further erosions in the municipal bond market have caused the values of the funds portfolio securities to decline."