Highlights from the Panel

Municipal Bond Webcast Highlights

February 3, 2011

Speakers Christine Todd with Standish Mellon and Peter Coffin with Breckinridge Capital Advisors discussed the recent volatility experienced in the municipal bond market along with observations about the opportunities that exist in this sector of the market.  Key takeaway points from the panel discussion:

• The Municipal Bond Market is large (2.9 Billion) but still fragmented; issue size is small, transparency is often difficult.
• Three types of risks are facing municipal bond investors today, Liquidity Risk, Event Risk and Credit Risk
• The market witnessed heavy new supply mid-November 2010 through mid-January 2011 due to many issuers wanting to take advantage of the Build America program that ended in 2010.
• Recently, both Hedge fund and institutional managers are purchasing municipal bonds for the total return benefits and attractive valuations.
• The support of the Commercial and U.S. Banks to municipal issuers for short term financing - is about 400 Billion in a 3 Trillion dollar market with only about 100 Billion coming due in 2011, essentially a very small issue.
• States consideration of filing Chapter 9 bankruptcy. Both the government and states have now officially noted that this would not be in the best interest of either party. This is a perception in the marketplace and not a reality.

Peter Coffin and Christine Todd discussed this information in detail in terms of historical data discussing various factors affecting state and local governments.  For a full copy of this presentation and additional information contact us.