Bond Bore Blog

New Rules for Municiple Underwriters (Municipal Bonds)
The NY Times is reporting that the SEC has adopted new rules for banks underwriting municipal bonds. They state:

Until now, the underwriters were required only to charge investors who bought a municipality’s bonds a fair price. They had no such obligation for their dealings with states and cities. Many bond deals over the last decade were so complex it was hard for local officials to even understand how they worked, much less confirm that the terms were fair. Underwriters will also be required to tell their municipal clients about any payments received from other firms like bond insurers taking part in bond transactions.

Posted by Bond Bore at 08:50 2012-05-07 | Trackbacks (0) | Comments (0)

Tobacco Revenue Bonds (Municipal Bonds)
The NY Times has an interesting piece on bonds issued by states against revenue from the 1998 tobacco settlement. They say:

The prospect of eventual defaults among the hundreds of outstanding bonds underscores the risks inherent in forecasting tobacco payments decades down the road. In the rush to market, many overlooked a basic conflict: the states were banking on a certain level of payouts, even as they adopted antismoking measures that would reduce those amounts. As a result, the historically safe municipal bond market has been peppered with something unusual, a type of muni that actually defaults.

Posted by Bond Bore at 11:18 2012-05-05 | Trackbacks (0) | Comments (0)

S & P Says Default Rate Rose in April (Junk Bonds)
According to S&P, the junk bond default rate rose to 2.6% in April from March's 2.5%. Reuters and Barron's also covered the story.
Posted by Bond Bore at 10:19 2012-05-03 | Trackbacks (0) | Comments (0)

Treasury Considering Floating Rate Notes (General)
The US Treasury Department held a press conference today announcing they are still considering add new floating rate notes. The spokesman said:

We have been talking about looking at new products for about a year, well, for about 15 months now," he said. "The consistent feedback that we've gotten from the marketplace is that floating-rate notes could potentially be something that would be additive to Treasury's mix of offerings."

The story was covered by Reuters and the WSJ.
Posted by Bond Bore at 11:12 2012-05-02 | Trackbacks (0) | Comments (0)

WSJ on the Changing Structure of the Corporate Bond Market (Financial Regulation)
The WSJ has an article on the changing structure of the bond market.

This system is being threatened by three forces: the "Volcker rule" that will ban U.S. banks from trading on their own account, more stringent capital requirements, and regulatory efforts to inject more transparency into bond and derivative trading.

The article focuses on existing market players like issuers and ignores the high cost of trading for individual investors in the current system.
Posted by Bond Bore at 11:09 2012-04-30 | Trackbacks (0) | Comments (0)