The Underfunded Pension: States Take Action

State and local governments with significant pension funding shortfalls are coming under increased political pressure due to new transparency rules in accounting. My colleague Joe Rosenblum examines their options.

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Municipal Pensions: A Big Problem?

Underfunded pension systems pose significant challenges to many state and local governments. For a few, it’s an immediate problem. But as my colleague Joe Rosenblum explains, for most municipalities, pension troubles aren’t really the proverbial last straw.

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Three Cities in Three Weeks: A Significant Trend in Municipal Bankruptcy?

On Tuesday, San Bernardino, California, became the third California city in three weeks to announce its intention to seek bankruptcy protection. Does this mark the beginning of a significant trend toward bankruptcy, particularly in California? My colleague Guy Davidson examines the patterns.

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Stockton’s Bankruptcy: Not a Harbinger of Things to Come

The financial failure of Stockton, California, is a sad tale of inflated expectations and poor decision making, but it’s not a harbinger of things to come in the US municipal bond market. Stockton is a unique case, as my colleague Guy Davidson explains below.

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Don’t Be Caught Long: Strategies to Curb Interest-Rate Risk in the Municipal Market

A municipal portfolio full of bonds with maturities in the 20- to 30-year range is exposed today to the high risk of rising interest rates. As my colleague Wayne Godlin explains, now may be the right time to shorten your duration and lower your credit quality.

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What We’ve Learned from Municipal Distress

Is the municipal bond market on the verge of collapse? You might think so, given the blaring headlines about a few big disasters in the last year. But as my colleague Joe Rosenblum explains below, poor decision making, not systemic issues, has caused the most serious problems.

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The Importance of Being Active

The financial crisis of the last four years has damaged the financial conditions of cities and states—and municipal bond insurers. In our view, this has increased the value of research and undermined individual investors’ classic approach to municipal bonds: laddering. My colleague Guy Davidson explains why, below and in the Reuters muniland blog.

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Rolling for Return

Today’s low interest rates and the uncertainty around the timing of future increases have convinced some bond investors to invest in shorter-term bonds and cash. But yield is just one of several sources of bond returns that investors can pursue, as my colleague Terry Hults explains below.

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General Obligation Bonds Were Never Risk Free

You may have seen an article on the front page of The New York Times business section on December 23, “Bankruptcy Filing Raises Doubts About a Bond Repayment Pledge”. In our view, it is inflammatory. Below, my colleague Joseph Rosenblum offers a more balanced approach.

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Are Utility Bonds Vulnerable to a Municipal Raid?

A reader who saw our recent article, “Navigating Rocky Municipal Bond Markets,” asked whether any essential service bonds were downgraded this year, and suggested that municipal bond issuers might load up, or even hide, excess debt in its water districts. Here’s the reply from Joseph Rosenblum and our municipal credit team.

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