Best of the Bond Market for June 27th, 2012
Bloomberg: Stockton, California, To File For Bankruptcy Protection
Stockton, California, said it will file for bankruptcy after talks with bondholders and labor unions failed, making the agricultural center the biggest U.S. city to seek court protection from creditors.
WSJ: The Stockton Bankruptcy: Should Investors Be Worried?
Matt Fabian, managing director of research firm Municipal Market Advisors, doesn’t find that particularly surprising. Yesterday, he noted in a report to clients that he doesn’t “expect negative market action [to] follow the filing; the city’s situation has been well discussed in the industry and the media and it does not appear as precedent to additional filings by other CA cities in the near term.”
Property Casualty 360: Bond Insurers, Investment Portfolios Should Weather Stockton Bankruptcy
The largest city to file for bankruptcy protection in the United States will not spell doom for municipal-bond insurers, and only a dramatic rash of municipal failures would do serious damage to that industry segment, an economist says.
The Atlantic Cities: The 7 Biggest Cities to File for Bankruptcy
Stockton’s the Biggest but as Cate Long Points out, all less than 300K in population.
ETF Trends: Risks of Muni Bond ETFs
Issuers are lowering the safeguards in the tax-free municipal bond market, taking advantage of increasingly high demand for munis in a low yield environment. Learn Bonds: Muni Investment Idea: Consider Taxable Munis – This month both Breckinridge Capital Advisors and Janney Capital Markets published articles in favor of Taxable Municipal Bonds. Overall, they are both very bullish on these bonds
MorningStar: Our Outlook for the Credit Markets
We think that barring a complete financial meltdown in Europe or an especially hard landing in China, interest rates have likely bottomed out and should head higher over the medium term to provide investors …
