Heather Gillers
speaker
548 appearances
11 recordings
1 series
first heard Nov 2018
last heard Oct 2021
Heather Gillers’s voice in public audio — every appearance, attributed to the second.
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Appearances
That means they're using taxable debt to refinance tax exempt debt and effectively transforming outstanding tax exempt bonds into taxable bonds, further shrinking the available supply of these tax exempt bonds, even as they're growing more precious to taxpayers.
For municipalities, it's a really good time to borrow.
With low rates, they can get funds for construction projects, infrastructure projects.
This is a really good time for municipalities, cities and states to borrow.
Because interest costs are so low, they can borrow.
sell bonds for bridges, schools, infrastructure projects, what have you, at much lower interest rates than at most times in the past.
There's a number of reasons for that.
First of all, after the 2009 recession, you saw a number of municipalities, notably Puerto Rico, Detroit, some cities in California, declare bankruptcy.
And although those
municipalities constitute a small fraction of the large number of municipalities in the market, they got a lot of attention, understandably, and that scared municipal bond investors
And they thought, well, better to invest in an account where someone is managing the money than for me, myself, the household mom and pop investor to be making all these decisions about which cities and states are credit worthy.
That's one reason.
Another reason is that the cost of buying and selling bonds outright can be a lot higher than investing in a mutual bond fund.
That concentration has increased very rapidly in the past decade.
And at the same time, other major holders of municipal bonds, such as banks, insurance companies, households who hold bonds outright, have reduced their holdings.
So increasingly, mutual funds are these really major holders of bonds in the municipal bond market.
And if you also take into account separate accounts, which is another way of
investing in municipal bonds with asset managers, it's an even larger portion.
That is causing concerns for some analysts because in the event of volatility, if you had a situation where people started withdrawing their money from municipal bond mutual funds in droves,
Those mutual funds would have to unload those bonds very quickly and they wouldn't have maybe the same ready customers as they have in the past.
Showing 321–340 of 548 · page 17 of 28
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