Apr 21, 2013 | by Franck Cushner, CFP®
As some states improve their financial circumstances, it also poses a challenge for municipal bondholders as there is less of a demand for municipal bonds, whose interest is considered tax-free.
A number of states have presented proposals to either eliminate new or reduce state income taxes
These states include Arkansas, Indiana, Iowa, Louisiana, North Carolina, Ohio, Oklahoma, and Wisconsin.
Historically March has been the worst performing month for municipal bonds for decades. This is because investors sell municipal bonds ahead of the April tax deadline, while March has comparatively had few maturing bonds.
The SEC brought securities fraud charges against Illinois for misleading bond investors about the extent of its pension plan underfunding.
California had to raise the yield on a $2.1 billion bond offering for state bonds, because of a lack of institutional demand. This in turn, increases the state’s borrowing costs.
Michigan appointed a bankruptcy attorney to try to rescue Detroit from financial distress.
Puerto Rico saw its credit rating cut to near junk status by S&P, as Moody’s had done the same in December.
Sources: Bloomberg, MSRB
1140 Ave. of the Americas, 10th Fl, Ste 956, NY, NY 10036
Ph. (212) 489-1800
Ensemble Financial © 2021
All Securities and Advisory Services provided under the name Ensemble Financial, Inc. are offered through Titleist Asset Management, Ltd. ("TAM"), a Registered Broker/Dealer & Registered Investment Advisor and member FINRA & SIPC. Customers working with Ensemble Financial, Inc. will be dealing solely through TAM with respect to their investment, brokerage and securities transactions. TAM does not offer or provide legal or tax advice. Please consult your attorney and/or tax advisor for such services. Member FINRA and SIPC.