Bonds sold to finance Florida housing developments are being issued at the fastest rate in six years as investors seek extra yield from the municipal debt even as 85 percent of such securities have defaulted since 2008.
Genesis HealthCare System in southeast Ohio sold $295 million of municipal bonds in the biggest junk- rated hospital deal since 2011 as investor demand for extra yield shrinks the penalty on such borrowers by 50 percent.
From Florida to Michigan, states are readying record budgets as tax collections are set to exceed prerecession peaks. The achievement is going unrewarded in the $3.7 trillion U.S. municipal-bond market.
John Miller at Nuveen Asset Management LLC, who beat all of his municipal bond-fund rivals last quarter, is betting a U.S. housing rebound will help extend the longest rally since 2010 in high-yield local debt.
Threats of conflict coming from North Korea have increased international scrutiny of untested young dictator Kim Jong Un, as the isolated nation announced today that it will restart a facility capable of expanding the regime’s nuclear arsenal.
Federal spending cuts this year will mean job losses and lower tax revenue while reduced aid will put pressure on budgets in many states that may lead to tax increases or service rollbacks, according to BlackRock Inc.
Investors in the $3.7 trillion municipal market should expect lower returns in 2013 than the prior two years, when local yields rallied to a 47-year low, said Peter Hayes, BlackRock Inc.’s head of muni debt.