November 26, 2018
I hope everyone had a very Happy Thanksgiving. For this week’s blog, here is a collection of thoughts on timely subjects:
2018 is coming to a close. There are only about three weeks left this year with a potentially meaningful supply of bonds. According to The Bond Buyer data, through the end of October, supply of bonds (by par) was down year-over-year by nearly $45 billion in 2018.
All of the forecasts we’ve seen for issuance in 2019 project between $350 billion and $375 billion to be issued. So more than 2018 but not as strong as 2017.
Conferences are winding down. This week, BondLink will be attending/participating in two conferences. The first is the Association of California Water Agencies Fall Conference & Exhibition in San Diego. Come see us at booth 706 if you’re there. We’ll also be attending the Massachusetts Investor Annual Investor Conference in Boston this Wednesday.
Also coming soon is the annual awards dinner hosted by The Bond Buyer. BondLink is proud to be associated with a number of honorees, including Wayne County, MI which was awarded the Midwest Regional Deal of the Year Award. This year’s Trailblazing Women in Public Finance includes Deborah Goldberg, Massachusetts State Treasurer and Chair of the Massachusetts School Building Authority; and Sarah Riordan, Executive Director and General Counsel of the Indianapolis Local Public Improvement Bond Bank.
Issuers continue to make news. The Bond Buyer’s Kyle Glazier had a great piece on Washington, D.C.’s new capital asset management system, which gives the District’s financial team and its Council the ability to drill down into its inventory of public infrastructure to determine its useful life and repair/replacement schedule. You can read our take on this from last week here.
Part of Washington, D.C.’s updated capital plan includes $2.3 billion for The Washington Metropolitan Area Transit Authority (or WMATA). WMATA itself is coming to the bond market this week, with plans to issue $245 million gross revenue transit bonds in a negotiation transaction led by Citigroup. For more info on the bond sale, visit www.WMATABonds.com.
Sticking with must-read articles, the Wall Street Journal wrote an insightful story on the rising costs of infrastructure investments for state and local governments due to higher material and labor costs. The article specifically points to the higher costs of steel, which is a critical building material for large public projects like bridge repair. The cost of borrowing for public infrastructure is also a factor, though not cited in the article. While long-term interest rates have backed down in the last week due to the sell-off in the stock market, they remain a significant source of volatility for finance directors planning their capital spending in 2018 and 2019.
You can also help us pick our “story of the year.” I’m collecting submissions for the top 2018 story in #muniland. Please send me your suggestion for the issue or topic that dominated our market in 2018. I look forward to hearing from you.
CEO & Co-Founder @ BondLink