The Philadelphia school Kisha Javis’s daughter attends is among buildings that may close in June as the eighth-biggest U.S. district tackles deficits. Investors have backed the fiscal plan, pushing the district’s municipal bonds to a three-month high.
Philadelphia, which has the lowest credit grade among the five most-populous U.S. cities, is planning its largest general-obligation issue on record after holding an unprecedented closed-door conference to draw buyers.
The biggest rally in three years in corporate bonds from the U.S. to Europe and Asia is losing steam, with the debt poised to deliver the first monthly losses in a year as the fiscal cliff imperils America’s economic recovery.
Tax-exempt bonds gained for a fourth straight week, the longest stretch since May, as yields remained higher than U.S. Treasuries and as investors saw the bankruptcy of Jefferson County, Alabama, as an isolated event.
A gauge of U.S. company credit risk rose for the first time in three days, paring an earlier drop, as data showed euro-area economies are weakening further, increasing pressure on policy makers to curb the fiscal turmoil.
A benchmark gauge of U.S. company debt risk fell the most in more than two weeks after data showed housing starts rose to the fastest pace in almost four years as demand increased in the residential real estate market.
The bankruptcy of Jefferson County, Alabama, may keep municipal yields that are already high relative to U.S. Treasuries elevated as some investors flee tax- exempt debt, according to Michael Schroeder, president and chief investment officer of Wasmer, Schroeder & Co.