With Illinois facing a growing pile of bills from Medicaid providers that is adding to its fiscal woes, the state’s finance authority board on Tuesday gave preliminary approval to a program to speed up payments. Get the full story »
Inside these posts: Bonds
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Evans: Fed should complete $600B in bond buys
The U.S. Federal Reserve Bank should complete its planned $600 billion in bond purchases, but probably does not need to do buy additional bonds to support the economy, a top Fed official said on Monday. Get the full story »
Evans: Fed doesn’t need to extend bond-buying
The Federal Reserve should complete its current round of bond-buying, designed to support the recovery, and likely does not need to extend it, Chicago Fed President Charles Evans said on Friday. Get the full story »
Illinois bonds sought after despite fiscal woes
Investors skimmed over Illinois’ well-known financial troubles to vie for a piece of a $3.7 billion taxable pension bond sale on Wednesday.
The state received $6.1 billion in orders from a record 128 investors, according to John Sinsheimer, the state’s capital markets director. Get the full story »
High yield may up demand for $3.7B Illinois bond
The cash-strapped state of Illinois will likely offer juicy yields to entice buyers of a $3.7 billion taxable pension bond expected to be sold Wednesday in the municipal-bond market.
According to a term sheet, initial price talk for the longest maturity in the offering, dated 2019, is about 2.40 percentage points above comparable Treasurys, for a yield of about 5.85%. That is about 1.79 percentage point more than comparably rated nine-year debt from cigarette maker Philip Morris International Inc., which traded at 0.61 percentage point above Treasurys on Tuesday. It is also 0.05 percentage point tighter than the initial price target on the deal for that maturity. Get the full story »
Illinois bonds, budget in muni market spotlight
Illinois’ lingering fiscal problems will be center stage in the U.S. municipal bond market next week as the state sells $3.7 billion of bonds and as its governor unveils a budget plan for the upcoming fiscal year. Get the full story »
Moody’s downgrades outlook for O’Hare revenue bonds
By Jon Hilkevitch | A major credit rating firm delivered a stern warning Monday regarding the mounting risks that Chicago is taking by going deeper into debt in an attempt to build more runways at O’Hare International Airport without securing financial support from the airlines.
Moody’s Investors Service downgraded to a “negative” outlook from “stable” some of the revenue bonds that the Chicago Department of Aviation has issued to help pay for the $15 billion O’Hare Modernization Program and related projects.
Moody’s cited concern about the city’s latest gambit to postpone repayment of all interest on some construction bonds until at least 2018, resulting in much larger payments over the long run. The airlines and their customers would eventually be stuck paying for the increased borrowing costs through higher landing fees and higher airfares. Get the full story »
Bond investors rattled by Illinois’ budget woes
As Illinois lawmakers huddle behind closed doors this week trying to find ways to plug the state’s $13 billion deficit, municipal-bond investors are sizing up how to wager amid the state’s woes.
The state’s bonds have the highest spreads — a measure of the perceived risk of default — of any state, according to Thomson Reuters data. Meanwhile, the cost of insuring against the bonds’ default keeps rising. Many muni-bond investors are avoiding Illinois even as they buy bonds of other cities and states. Others believe the state may prove a good bet, either because it will get its financial act together or be aided by the federal government. Get the full story »
U.S. to hit debt limit in March or April
As Republican lawmakers threaten a showdown over the federal debt limit, bond investors are calculating when they should start to get nervous. The answer: early March, and probably, really worried in April.
Wall Street economists, looking at recent seasonal spending and revenue trends, estimate the $14.3 trillion debt limit will be reached toward the end of March or sometime in April if Congress fails to raise it before then. Get the full story »
Bonds flat after Chinese rate hike
A move by China to slow the pace of its economic growth is having a minimal impact on the U.S. bond market.
Bond prices are mostly flat on a day when the remnants of a blizzard in the Northeast disrupted much of the financial industry. Stock and bond markets are seeing little trading volume during a week that has traditionally been one of the quietest of the year. Get the full story »
Mortgage rates climb to 6-month high
U.S. mortgage rates extended their bounce from recent record lows in the latest week, according to Freddie Mac’s weekly survey of mortgage rates, as Treasury yields continue to climb.
The 30-year fixed-rate mortgage averaged 4.61 percent for the week ended Thursday, up from the prior week’s 4.46 percent but down from 4.81 percent a year ago. Get the full story »
Bonds pare gains after Chicago ISM data
The U.S. government debt market trimmed gains on Tuesday after data signaled faster-than-expected manufacturing growth in the U.S. Midwest region. Get the full story »
Illinois tobacco bonds to fly with ’sweet’ yield
From Bloomberg News | Illinois began taking orders from individuals on $1.46 billion in municipal bonds backed by tobacco settlement payments to help meet $2 billion in outstanding bills. The so-called Railsplitter Tobacco bonds are the week’s largest issue and the state’s biggest tax-exempt borrowing since a $1.5 billion refinancing deal in February. Get the full story>>
