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 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.
Pennsylvania State University faces a credit-rating downgrade from Moody’s Investors Service following sanctions resulting from the child-sex-abuse case involving former assistant football coach Jerry Sandusky.
Credit ratings are becoming irrelevant in a bond market where investors still perceive AAA companies from Johnson & Johnson to Microsoft Corp. to be a higher risk than recently downgraded U.S. Treasuries.
Ralph Attarian, a 47-year-old caddy, puffed cigarettes as he played a penny slot machine in Philadelphia’s SugarHouse Casino, adding to the pot of money that has helped Pennsylvania reap more tax revenue from gambling than any state for three years running.
U.S. local-government tax revenue has fallen for six straight quarters and states are trimming aid to municipalities. That hasn’t deterred investors from pushing debt of cities and towns to the longest rally in five years.
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.