To shed more than $1.4 billion in debt, Jefferson County, Alabama agreed to give up some of its power to set future sewer rates, a compromise that means the second-biggest U.S. municipal bankruptcy might be brought back to life decades from now.
Richard Ciccarone, chief research officer at McDonnell Investment Management, will focus on his other companies tracking local governments and the $3.7 trillion U.S. municipal market when he retires from the firm at the end of the year.
Illinois lawmakers return to their chambers today with the goal of bolstering the weakest state pension system. Investors are skeptical of their resolve, demanding a record yield cushion to own the state’s obligations.
Republicans are poised to win the most governorships since 1994 as candidates including Pennsylvania’s Tom Corbett , Michigan’s Rick Snyder and Ohio’s John Kasich seize on the faltering economy and persistent unemployment in bids to take over Democrat-led states.
Municipal-bond insurance, which once covered half of the $400 billion of debt sold by U.S. state and local governments annually, “won’t be making a comeback,” said Howard Cure , director of municipal research at Evercore Wealth Management.
Illinois has set aside only 45 percent of what it needs to meet public-worker pension obligations, the worst of any U.S. state. Standard & Poor’s may cut its bond rating if lawmakers don’t come up with a fix tomorrow. Investors are unfazed.
Investors in the $3.7 trillion municipal market assumed Illinois lawmakers would fix the worst- funded U.S. state pension system. The legislature’s latest failure is showing buyers the cost of inaction.