Encyclopedia of Municipal Bonds E-Book

Joe Mysak

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Bloomberg Professional
• Sprache: Englisch

Seitenzahl: 378

Veröffentlichungsjahr: 2011

Beschreibung

An accessible reference that explores every aspect of the municipal bond market Until now, there has been no accessible encyclopedia, dictionary, nor guide to the world of municipal bonds. Comprehensive and objective, this groundbreaking volume covers the history and mechanics of the municipal market in clear and understandable terms. It covers all aspects of the market, including pricing, trading, taxation issues and yields, as well as topical events such as the financial crisis, hysteria about defaults and Chapter 9 municipal bankruptcy, fraud, and regulation. Encyclopedia of Municipal Bonds also contains entries on important historical events and provides much-needed context for this field. * Everything you ever wanted to know about municipal bonds in one comprehensive resource * Joe Mysak is the author of the Bloomberg bestseller Handbook for Muni Issuers * Demystifies the world of municipal bonds for both the novice and professional investor * Explores issues such as the Orange County bankruptcy, the Jefferson County default, the New York City financial crisis, and the surprisingly recent creation of the modern municipal market Encyclopedia of Municipal Bonds offers an essential reference guide for investors, professionals, regulators, insurers, and anyone else involved in the municipal bond market.

Leseprobe

Contents

Acknowledgments

Introduction

A

ability to pay

acceleration

additional bonds test

advance refunding

advertised sale

“All bonds go to heaven”

Ambac

AMT

appropriation

arbitrage

Arkansas Default of 1933

auction-rate securities

auction sale

authorities

B

bank-qualified

basis points

Baum pools

Bell, California, pay scandal

bid rigging

black-box deals

blind pools

Blue List

BOCES

bond anticipation notes

bond banks

The Bond Buyer

Bond Buyer indexes

bond counsel

“Bond Daddies”

bond purchase agreement

bond year

book-entry-only system

Bradford zeroes

Build America Bonds

C

CAFR

calls

Canadian interest cost

capital appreciation bond

capital gains

certificates of participation

Chapter 9

charter schools

closed-end funds

cogeneration projects

colleges and universities

community development districts

competitive sale

computers

constitutional protection of tax-exemption

convention centers

CPI-linked municipals

cram-down

credit default swaps

credit enhancement

current refunding

CUSIP

D

“Deadly Sins”

debt per capita

default

Denver International Airport

Dillon’s rule

dirt bonds

disclosure

Dodd-Frank Wall Street Reform and Consumer Protection Act

Mrs. Dodge

E

elections

EMMA

escrow churning

escrowed to maturity

F

feasibility studies

Fed Flow of Funds report

Ferber trial

50 percent coupon

financial advisers

fiscal year

501(c)(3) issuers

flipping

floaters/inverse floaters

flow control

G

garbage

gas prepayment bonds

GASB

general obligation

GFOA

golf courses

government census

guaranteed investment contracts

H

Hammersmith

Heartland fund implosion

house museums

I

“Ideas in public finance blow in from the West”

indenture

Indian tribes

industrial development bonds

initiative and referendum

insider trading

insurance

interest

inverse floaters

investment pools

issue price

issuer concentration

J

Jefferson County, Alabama

K

Kentucky Department of Finance v. Davis

L

laddering

last looks

lease financings

legal opinion

letters of credit

liens

limited obligation

M

market activity

Marks-Roos

Mello-Roos

mini bonds

moral obligation

mortgage bonds

MSRB

Municipal Assistance Corporation

municipal utility district

mutual funds

N

negotiated sale

net asset value

net interest cost

New Jersey pension obligation bonds of 1997

New Jersey Turnpike scandal of 1993

New York City financial crisis of 1975

NRO

O

official statement

OPEB

open-end funds

Orange County, California

original issue discount

out-of-state authorities

P

par

pay-to-play

pension obligation bonds

pensions

“People don’t buy municipal bonds to get rich; they buy municipal bonds to stay rich”

Philadelphia trial

PIT bonds

preliminary official statement

premium bonds

premium laundering

prerefunded bonds

price to the par call

pricing

principal

private placements

Proposition 2½

Proposition 13

public–private partnerships

Puerto Rico

pyramid bonds

Q

Qualified School Construction Bonds; Qualified Zone Academy Bonds

R

ratings

the ratio

Recalibration of 2010

redemption

refunding

repudiation

reserve fund

retail order periods

revenue bonds

RFPs

risk factors

rollover

Rule 15c2-12

rum bonds

S

Saco, Maine

scales

sealed bids

secondary market

serial bonds

William F. G. Shanks

stadiums

state intercept programs

swaps

synthetic fixed rates

T

take and pay, take or pay

takedown

tax anticipation notes

tax caps

tax-exemption

tax increment financing

taxable municipals

taxable tails

tender-option bond programs

term bonds

Texas Permanent School Fund

tobacco bonds

toll roads

total return

tourist attractions

Tower Amendment

trick coupons

true interest cost

trustee

U

ultra vires

underwriters

unfunded pension liabilities

V

value per capita

variable-rate demand obligations

W

Washington Public Power Supply System

waste-to-energy facilities

Who owns municipal bonds?

willingness to pay

window bonds

Y

yield burning

yield curves

yield to maturity

Z

zero-coupon bonds

About the Author

Copyright © 2012 by Joe Mysak. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Mysak, Joe.

Encyclopedia of municipal bonds : a reference guide to market events, structures, dynamics, and investment knowledge / Joe Mysak.-1

p. cm.— (Bloomberg financial series)

ISBN 978-1-118-00675-7 (cloth); ISBN 978-1-118-17803-4 (ebk); ISBN 978-1-118-17843-0 (ebk); ISBN 978-1-118-17847-8 (ebk)

1. Municipal bonds–Encyclopedias. I. Title.

HG4726.M94 2012

332.63′23303—dc23

2011032160

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The Bloomberg Financial Series provides both core reference knowledge and actionable information for financial professionals. The books are written by experts familiar with the work flows, challenges, and demands of investment professionals who trade the markets, manage money, and analyze investments in their capacity of growing and protecting wealth, hedging risk, and generating revenue.

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Acknowledgments

The Encyclopedia of Municipal Bonds is the work of a career rather than of a few months or even years, and I am pleased to acknowledge here the contributions of some of the people who helped make my career.

In December 1980, I interviewed with a soft-voiced gentleman then building the staff of a newspaper that covered the municipal bond market, called The Daily Bond Buyer. He didn’t find my lack of financial expertise to be a drawback; if anything, he said, that was a plus. He wanted people who could write clear English. When could I start? To John H. Allan I owe my career in this odd little market. I was his first hire at the newspaper, and was soon joined by scores more, many of whom are still in the profession. John was the father of us all.

Editors are fired when their bosses get tired of them. When that happened to me in 1994, Jim Grant, founder of Grant’s Interest Rate Observer, invited me to come and work for him. I have on my desk five bound volumes of Grant’s Municipal Bond Observer and two of Grant’s Municipal Bond Issuer, and consult them to this day. My idea for the publication, I see now, was that the municipal market was, in general, a safe place, and that what investors really needed was a guide to what not to buy. I am pleased to say that almost every nutty, unrated, high-yield deal we wrote about went bust. This perhaps was not a formula for success as measured in terms of circulation, however. Jim was a patient man. So was publisher Jay Diamond. I am fortunate to count them as my friends.

In May 1999, my old boss John McCorry called me while I was on vacation and said there was a big job awaiting me at Bloomberg. When I returned, I sent an e-mail to Matt Winkler, then, as now, famed as the editor of a hard-driving, fast-expanding news service. Over lunch, Matt offered me a job as a columnist. It has been my good fortune to work for him since then, and in a variety of jobs.

Their bylines appear numerous times among the sources for the entries here, but I would be remiss if I did not mention writers past and present on the states and municipalities beat at Bloomberg: Tom Cahill, Darrell Preston, Martin Braun, William Selway, Brendan McGrail, Jerry Hart, Michael McDonald, and Mike Quint, as well as managing editor William Glasgall and executive editor Susan Goldberg. Then there are the colleagues here who ornament the hours and make the days nicer: Reto Gregori, David Wilson, Tom Keene, Caroline Baum, Manuela Hoelterhoff, Laurie Muchnick, Lisa Kassenaar, Lisa Wolfson, Joyce Kehl, and Beth Williams.

In August 2010, Ted Merz spotted me in the office on a Sunday and told me all about his new venture, Bloomberg Briefs, a series of newsletters, and suggested I start one on municipal bonds. And so, the world coming full circle, since February 2011 I have been editor of a daily publication all about the municipal bond market. Thanks to Ted and Brian Rooney, and to all who make up the early-morning world of Bloomberg Briefs: Jennifer Rossa, Rose Constantino, Katie Porter, Ian Maready, Rob Williams, Mike Nol, Deirdre Fretz, Nathaniel Baker, Nicole Allen, Doug Simmons, Mike McDonough, Joe Brusuelas, and Richard Yamarone.

The Encyclopedia would not have been possible without the unflagging efforts of our librarians: Michael Novatkoski, Nick Tamasi, Mike Weiss, and Anita Kumar.

Bloomberg provides its users with ease of access to information. And so I must mention all those in Data who have helped me gain access to their world: Mike Olander, Joe Helmlinger, Sowjana Sivaloganathan, Bert Louis, and Andy Peszka.

Thanks here to Steve Isaacs of the Bloomberg Press imprint, who asked me whether I wanted to update my 1998 Handbook for Muni-Bond Issuers, and at John Wiley & Sons, my thanks to Evan Burton and Meg Freeborn.

The current mania in MuniLand not to comment for the record about anything, ever, is a disturbing one. Journalists are lost without sources. I have been blessed to have many good ones over the years.

James B. G. Hearty was a source, both as an issuer and as a banker, and is a friend. Thanks, pal.

Kit Taylor, executive director of the Municipal Securities Rulemaking Board (MSRB) for three decades, was both an early source and a patient teacher—a guide, if you will, to MuniLand and its history.

He wasn’t alone. Among the analysts who have helped me are Jim Cusser, Richard Ciccarone, Austin Tobin, J. B. Kurish, Natalie Cohen, Tom Doe, Dennis Farrell, Robert Kurtter, Robin Prunty, George Friedlander, John Hallacy, Tom Kozlik, Richard Larkin, Sylvan Feldstein, and Parry Young. Richard Lehmann of the Distressed Debt Securities newsletter has been a reliable source on an often inscrutable topic, defaults.

Municipal bond lawyers have played a special part in my education. Since 1994, I have been a speaker at the annual Bond Attorneys Winter Workshop at the invitation of John L. Kraft, whom I have known since at least 1985. That is, the first time I quoted him in a story was in 1985, on the New Jersey Turnpike’s then-record $2 billion bond issue. I suspect we go back even further than that. It has been a privilege to speak before this group, and I am pleased to acknowledge it here. In particular, I’d like to thank Robert Dean Pope, John VanDuys, Bob Jones, Dave Franklin, Fredric Weber, Brad Waterman, Ken Haynie, Rick Weiss, Don Howell, Jerry Turner, Fred Rosenfeld, Margaret Pope, Phil Genetos, Tim Frey, Bill Danhof, Glenn Floyd, Deborah Winter, Gary Walsh, Griff Pitcher, Tony Stemberger, and Todd Meierhenry. Bankruptcy specialist James Spiotto is not part of this group, but I’d be remiss if I didn’t mention his help.

The market’s regulators have always been kind. I’d especially like to thank Paul Maco, Martha Haines, Cliff Gannett, Charlie Anderson, Lynnette Kelly Hotchkiss, Hal Johnson, and Jennifer Galloway.

Financial advisers have walked me through many a deal that would otherwise have been indecipherable. Thanks to Peter Shapiro, Robert Doty, Lori Raineri, Freda and J. Chester Johnson, Doreen Frasca, John White, and James H. White III.

A few issuers have provided me with immeasurable assistance over the years. These include Ed Alter, Patrick Born, Frank Hoadley, Patrick Foye, Ben Watkins, Bob Bowman, and T. Spencer Wright. At the Government Finance Officers Association, I would like to thank Jeff Esser and Susan Gaffney for their assistance and guidance.

I was almost afraid to mention bankers who have helped me for fear they’d be fired, but I really do wish to thank Dave Andersen, Bob Downey, David Clapp, Michael Geffrard, Roger Hayes, Mike Crofton, George Marlin, Greg Finn, Ray Kljajic, Bud Byrnes, Mitch Asch, David Kotok, Chris Emmet, and Tim Davis.

Those on the other side of the equation, the buyers and money managers, have been especially good to me. Thanks to George Calvert, Eddie Horner, Hugh McGuirk, Chris Dillon, Ken Woods, Ron Fielding, Gary Pollack, Joe Deane, Evan Rourke and John Flahive, and John Wilen.

Thanks to my friends for all their support and for listening to too many stories about municipal bonds: Jack Doran, Steve Dickson, Pat Fitzgibbons, Ted Hampton, Mike Ballinger, Andy Ferguson, John Dougherty, Parker Bagley, Steve Gustavson, Mark Reed, and Howell Mette; Philipp, Julia, Katharina, Anna, and Amelia Windemuth; Ken Lindley and Clay Schudel.

Only my in-laws, Rob Merett, Bob Loughrey, and Jim Merett, have heard more of those stories, and even their patience pales in comparison with my wife’s. Thanks, Sue!

J.M.

Introduction

Welcome to MuniLand.

If I didn’t coin the term, I know I was one of its early adopters, featuring a map of the place in the first issue of a short-lived fortnightly I edited called Grant’s Municipal Bond Observer, in 1994. The idea behind “MuniLand”—and I refer to the term, not specifically the map—was a simple one: Here was a market that was particular and specific to an almost absurd degree. Calling it MuniLand was the usual attempt to bring order out of chaos. I used the word when attempting to explain the municipal market to those steeped—as most people are—in the culture of equities. I wanted them to, as the poet says, suspend disbelief. They were entering a new world, as strange and idiosyncratic as any uncharted island nation.