Distress and default rates in Fitch Ratings’ U.S. Public Finance (USPF) portfolio have been consistently lower than other rated sectors over the past two decades. The cumulative distress rate of 1% over the past two decades was the lowest among major market sectors rated by Fitch.
Mon 20 Oct, 2025 – 5:47 PM ET
Key Takeaways
Free Registration Required.
23-Oct-2025 | 11:20 EDT
Study finds state governments have a total of $2.7 trillion in debt, with 26 states exceeding $20 billion in debt each and 10 states over $70 billion.
State governments had $2.7 trillion in debt at the end of 2023, a new Reason Foundation analysis finds. This state debt is equivalent to approximately $8,000 per person nationally.
With $497 billion in liabilities, California had the largest state government debt as of the end of the 2023 fiscal year, the most recent year for which complete data are available.
Four other state governments had more than $200 billion in state debt: New York ($233 billion), Illinois ($223 billion), Texas ($217 billion), and New Jersey ($213 billion). Massachusetts had $120 billion in state liabilities, followed by Connecticut, Washington, Pennsylvania and Florida.
Meanwhile, 10 states—South Dakota, Idaho, Nebraska, Montana, New Hampshire, Utah, Vermont, Rhode Island, Wyoming, and Maine—each had less than $10 billion in debt at the end of 2023, according to Reason Foundation’s State and Local Government Finance Report.
reason.org
Mariana Trujillo
Managing Director
Jordan Campbell
Managing Director
October 23, 2025
The company gathers procurement data and signals from agencies and turns them into action for sellers of public-sector technology. The investment is just the latest bet on AI for local and state government.
Starbridge, a relative newcomer to government technology that uses AI for procurement, has raised $42 million.
Craft Ventures led the Series A funding round, which follows $10 million in seed funding earlier this year.
The investment reflects yet another bet, amid speculation of a market bubble, that artificial intelligence will boost public-sector operations while providing profitable returns.
Continue reading
govtech.com
October 24, 2025 • News Staff
The Georgia-based firm, looking to expand, has won a “strategic investment” from Riata Capital Group. The move comes as more public agencies beef up their payment offerings for taxes, permitting and other transactions.
Government Window, a Georgia-based company that sells payments software to local and state government, has received a “strategic investment” from Riata Capital Group, a Dallas-based private equity firm.
Terms were not disclosed.
The investment will go toward geographic expansion for Government Window, along with what a statement calls “the continued buildout of its leading payments software platform.”
govtech.com
October 20, 2025 • News Staff
TD Securities (TDS) has announced the integration of its Public Finance business, previously operating out of TD Securities (USA) LLC, into TD Financial Products.
“With all municipal business consolidated into one entity, we can now present a unified offering to our customers across all aspects of the municipal market, including public finance, voice trading, algorithmic trading, and structured products,” said Matthew Schrager, Managing Director and Co-Head, Automated Trading, TDS.
“This integration will also enhance our capabilities within these areas through more seamless internal collaboration. For example, we can now apply the modeling that drives our algorithmic business to other aspects of the market, such as public finance or voice trading. For clients, this means stronger liquidity and an enhanced ability to meet their needs,” he told Traders Magazine.
tradersmagazine.com
By Anna Lyudvig
October 23, 2025
Gravity, a leading disclosure and budgeting automation company for the public sector, has announced the acquisition of Cityspan, a provider of cloud-based grants management and performance measurement systems. The deal marks a major expansion in Gravity’s mission to deliver an end-to-end financial management solution for governments, connecting budgeting, reporting, grants, and citizen engagement through a single unified platform.
Based in Tampa, Florida, Gravity has rapidly emerged as one of North America’s fastest-growing technology providers in public finance. The acquisition of Cityspan adds robust grants lifecycle management tools to Gravity’s product portfolio, strengthening its ability to serve federal, state, and local governments.
Cityspan’s technology is widely used by major public agencies and supports the entire grants process, including applications, contracting, performance tracking, and outcome reporting. Its architecture will be fully integrated into the Gravity platform by mid-2026, complementing the company’s growing suite of financial management tools that includes disclosure, budgeting, lease management, and debt management solutions.
For governments, the integration of Cityspan’s capabilities into Gravity’s technology stack means the ability to manage every part of the financial lifecycle through one comprehensive system. This unified experience enhances compliance, audit readiness, and transparency while freeing staff from repetitive administrative tasks. The combined offering will help public agencies connect financial decisions directly to outcomes, creating a clearer link between taxpayer resources and community impact.
Cityspan’s grants and performance management tools will now operate alongside Gravity’s recently launched AI-powered Disclosure Studio and Engagement Studio platforms. These next-generation products are designed to streamline complex financial processes, simplify public disclosures, and foster better communication between governments and citizens. Together, they advance Gravity’s goal of transforming how governments handle financial data—moving from disconnected systems to an intelligent, integrated platform.
The acquisition also builds on Gravity’s growing momentum in the civic technology space following its recent purchase of coUrbanize, a leading community engagement platform. With Cityspan’s expertise and data-driven performance tools, Gravity is now positioned to lead a new era in government financial management, combining transparency, accountability, and operational efficiency.
KEY QUOTES:
“This acquisition represents a major step forward in our mission to provide governments with a comprehensive, connected financial management platform. Cityspan brings proven grants management technology that serves some of the nation’s largest public agencies. By integrating their capabilities into our platform, we’re enabling governments to manage the entire financial lifecycle – from grants and budgets to disclosures and community engagement – all in one place. We’re excited to welcome the Cityspan team to Gravity and to continue investing in their success.”
Tyler Davey, Chief Executive Officer, Gravity
“Data-driven transparency is transforming the way governments serve their communities. Integrating Cityspan’s trusted grants and performance management technology with Gravity’s innovative platform extends our shared commitment to open, accountable government. Together, we’re empowering public agencies to turn data into impact, ensuring every program, budget, and report reflects the real needs of the communities they serve.”
Mark Min, Chief Executive Officer, Cityspan
S&P Global Ratings occasionally receives questions from market participants regarding how it assesses the loss coverage capability of U.S. long-term municipal pools such as state revolving funds, bond banks, and permanent school funds. Our approach to assigning a loss coverage score (LCS) is specified in the “U.S. Public Finance Long-Term Municipal Pools: Methodology And Assumptions,” July 26, 2024, (see framework graphic). Here, we address some of the most frequently asked questions.
[Free registration required.]
14-Oct-2025 | 15:41 EDT
Key Takeaways
Investors in the $4 trillion U.S. municipal bond market are paying more for bonds with credible environmental, social, and governance information, even when those bonds are not officially labeled as “green” or “social.”
That is the key finding of a new study into the green bonds market, co-authored by Wharton finance professor Daniel Garrett, Penn PhD student Mahdi Shahrabi, and Oregon State University professor Brian Gibbons. It shows that municipal bonds with third-party ESG scores trade at higher prices, signaling cheaper borrowing costs for issuers. On average, yields — which move inversely to prices — dropped by 3 to 4 basis points when a bond received an ESG score, even if it had no formal label.
An ESG score is a third-party assessment of a bond’s environmental, social, or governance features. A label, by contrast, is a formal designation — like “green bond” — from the issuer that requires meeting strict international criteria.
Wharton
October 14, 2025
This report is dedicated to the memory of John Knox, Co-author of the first edition and a wonderful person, partner and public finance attorney.
What should leaders of local governments know about municipal bankruptcy? The 3rd edition of this report offers a practical overview of both avoiding municipal bankruptcy and navigating through a chapter 9 case should a filing be necessary. The report emphasizes that underlying financial problems – whether structural operating deficits or catastrophic losses – must be resolved regardless of bankruptcy filing status, and that while chapter 9 can greatly benefit a local government, it also comes with significant costs and long-term consequences.
Drawing on real-world municipal bankruptcy cases including Detroit, Stockton, Jefferson County, Vallejo and San Bernardino, the report provides actionable frameworks for financial crisis assessment, bankruptcy preparation procedures, and post-bankruptcy recovery strategies.
The Orrick Public Finance Green Book Series
October.14.2025
Concerns over cyber risks is growing in the municipal market as MuniOS got a ransomware attack that disrupted state and local borrowers’ ability to post debt documents on this platform for several days, until it went back online Thursday morning. Bloomberg’s reporter Erin Hudson discussed the story on “Bloomberg Markets” with Scarlet Fu.
Bloomberg Markets – Muni Moment
October 17th, 2025, 10:57 AM PDT
Takeaways by Bloomberg AI
A ransomware attack is disrupting state and local borrowers’ ability to post debt documents on the $4.3 trillion municipal-bond market’s main distribution platform.
MuniOS, a website operated by Ann Arbor, Michigan-based tech company ImageMaster LLC, has been out of service for several days due to the cyber attack, according to people familiar with the matter who asked not to be named discussing the private matter.
Borrowers use the website to showcase their bond offering documents, and it’s a popular service used by investors and analysts for information about transactions before they are sold. While market participants said they hadn’t seen or experienced any delays in deals, some issuers are shifting long-held practices by turning to alternative platforms such as BondLink due to the disruption.
Representatives for ImageMaster did not respond to requests for comment.
The municipal bond market is where US states, cities, transportation systems, airports, colleges and other borrowers raise debt to finance infrastructure projects. Local governments often post their offering documents publicly on websites like MuniOS to accessibly market the deals to both institutional and retail buyers.
Inconvenient Outage
The MuniOS outage is causing issuers, investors, bankers and lawyers headaches and inconvenience, but so far transactions have proceeded normally, according to multiple market participants who spoke on the condition of anonymity. The disruption has prompted some to directly send large-file PDFs between parties the old-fashioned way, while others have seen their days fill up with long phone calls from investors unable to access documents, they say.
The documents for a $1.8 billion sale by the Texas Transportation Commission were posted to a different platform called McElwee & Quinn LLC, a financial printing services company, according to a spokesperson for the Texas Department of Transportation. Additionally, the agency provided physical copies of the document to address investor inquiries. The sale is proceeding as planned, the spokesperson said.
In ransomware attacks, hackers will lock up computer systems — sometimes stealing sensitive data — and hold them hostage in return for payment. Cybercriminals have pulled off several high-profile attacks in recent months, with corporations from the beverage maker Asahi Group Holdings Ltd. to the carmaker Jaguar Land Rover Automotive Plc being hit.
Concerns over cyber risks have been growing in the municipal market as well, with credit rating analysts raising it as a concern. In one high-profile situation last year, a Detroit suburb’s bond sale was hacked and the proceeds were stolen.
The MuniOS website was launched in 1999 and is used by issuers to distribute and print their bond offering documents. Bloomberg reported in 2017 that the service had a market share of over 70%.
The Municipal Securities Rulemaking Board, the market’s self-regulatory organization, sent out a notice on Tuesday that issuers can use its EMMA website to post preliminary official statements and other market information.
The notice did not mention the outage at MuniOS.com.
Bloomberg Technology
Erin Hudson and Amanda Albright
October 15, 2025
— With assistance from Elizabeth Rembert and Lynn Doan
Takeaways by Bloomberg AI
Barclays Plc says the municipal-bond market is poised for new debt sales for space facilities after the enactment of the Trump administration’s One Big Beautiful Bill Act.
The legislation included a provision that would let spaceports sell tax-exempt bonds, known as private-activity bonds, similar to airports. In a report late last week, Barclays strategists led by Mikhail Foux said that there is no limit to issuance of spaceport bonds, unlike other types of private-activity bonds.
“This could become a relatively active municipal sub-sector, in our view,” they wrote. “Several bond issues might be coming to the market in the not-so-distant future.”
A spaceport is any facility located near a launch site or a reentry site. Eligible projects may be those that are used to operate flights, load cargo to or from the spacecraft, or manufacture and repair spacecraft, for example.
Barclays predicts that outstanding debt for spaceport bonds could grow to between $20 billion and $25 billion by 2034, based on estimates from the Joint Committee on Taxation.
The new financing tool “offers numerous benefits for private entities and corporations, as well as space agencies involved in space exploration and related activities,” wrote Edwin Oswald and Kevin Roche, partners at Orrick, Herrington & Sutcliffe LLP, in an August report.
In Florida, the state’s aerospace finance authority has identified $2.9 billion of infrastructure needs for the Kennedy Space Center and Cape Canaveral Space Force Station.
Space authorities in Oklahoma, Texas, New Mexico and California are potential future issuers of the debt, the Barclays strategists wrote in the report.
Bloomberg Markets
By Aashna Shah
October 20, 2025
Tax-exempt municipal bonds are the primary financing tool that state and local governments use to build roads, schools, water supply systems, public and non-profit hospitals and other public infrastructure. Today there are more than $3.5 trillion in active municipal bonds from more than 50,000 individual governments.
The goal of this research is to understand how tax-exempt municipal bonds impact communities. Using a first-of-its-kind dataset, we identify the types of state and local governments that use municipal bonds, and the types of infrastructure investments financed by those bonds, across US Congressional districts. This analysis allows us to explore previously-unknown patterns of municipal bond borrowing and investments both within and across regions. This analysis is based on data from ICE municipal bond reference and geospatial data.
Use the drop-down menu below to find a PDF-formatted report for each state and every Congressional district. Please contact Justin Marlowe (jmarlowe@uchicago.edu), Director of the Center for Municipal Finance, with questions or other feedback on this project.
The University of Chicago
Distress and default rates in Fitch Ratings’ U.S. Public Finance (USPF) portfolio have been consistently lower than other rated sectors over the past two decades. The cumulative distress rate of 1% over the past two decades was the lowest among major market sectors rated by Fitch.
Mon 20 Oct, 2025 – 5:47 PM ET
This is the U.S. Public Finance Rating Action Report 2025 Year to Date (1 January to 17 October).
Mon 20 Oct, 2025 – 10:36 AM ET
Fitch Ratings-Shanghai/New York-14 October 2025: Fitch Ratings has published the second edition of its 2025 Global Government-Related Entities (GREs) Data Comparator. This interactive Excel file lists 460 Fitch-rated public GREs across Corporates and Public Finance and allows users to filter by key rating drivers across the cohort.
Fitch defines GREs as entities with a significant relationship to a government, often reflected through ownership, control, or support. These entities typically perform public policy functions, benefit from government backing, or hold strategic importance to the government. This report details not only the final ratings for all Fitch-rated GREs, but also allows users to filter and compare entities based on their Standalone Credit Profiles, rating anchors, notches from the anchor — top-down (negative values), bottom-up (positive values), or equalized with the parent (zero) — and the key risk factors Fitch uses to assign an overall support score.
The matrix of assessment scores used by Fitch to assign a support score, following an assessment of a parent’s responsibility and incentive to support, together with the notching guideline are also included at the end of the report for reference. Fitch’s support point system and notching guideline are outlined in the report for reference. All data is as of the end of the third quarter (Sept. 30, 2025).
The GRE Comparator can be viewed at www.fitchratings.com.
Key Takeaways
16-Oct-2025 | 09:28 EDT
15-Oct-2025 | 15:50 EDT
View the S&P Ratings and Outlooks.
17-Oct-2025 | 16:02 EDT
14-Oct-2025 | 17:38 EDT
Fitch Ratings-New York/Chicago/San Francisco-15 October 2025: Fitch Ratings has published an exposure draft detailing proposed revisions to its rating criteria for Affordable Housing Projects (AHPs).
“The proposed revisions will broaden the scope of the criteria to include additional property segments, subsectors and additional forms of underlying collateral in response to recent trends and market developments,” said Fitch Senior Director Karen Fitzgerald.
The updated criteria will consolidate the existing “U.S. Affordable Housing Rating Criteria” (published March 2022) and “U.S. Military Housing Rating Criteria” (published June 2022) into a combined, sector-specific criteria report, which will cover affordable, mixed-income, military, workforce, senior, student and other types of affordable housing.
Highlights of the proposed AHP criteria include:
–Expansion of the scope of the criteria to encompass additional property segments (e.g., mixed-income housing), subsectors (e.g., federally enhanced multifamily mortgage loans) and additional forms of underlying collateral (e.g., residual cash flows and discrete income streams), and to add new analytical guidance related to the expanded scope.
–Enhancement of the current guidance for assessing various risks and attributes that are common across sectors (e.g., refinance risk) by incorporating existing analytical frameworks or by referencing other relevant Fitch criteria that can be used to analyze these features.
–Expansion of the existing guidance for assessing the risks and attributes of AHP transactions.
–Consolidation of the key rating driver (KRD) tables for affordable housing and military housing projects, providing ‘aa’ through ‘b’ attribute guidance for all KRDs across housing types.
“These revisions reflect Fitch’s ongoing commitment to analytical rigor, transparency, and market relevance in the affordable housing and military housing sectors.” Fitzgerald added.
Fitch anticipates proposed criteria updates will have no rating impact on current ratings. In addition to the exposure draft, Fitch has also published an Exposure Draft Frequently Asked Questions (FAQs) on the proposed Affordable Housing Project Rating Criteria.
Fitch is actively soliciting market feedback on the proposed criteria. Send comments to criteria.feedback@fitchratings.com by Nov. 21, 2025. Fitch’s “Exposure Draft: Affordable Housing Project Rating Criteria” and the FAQs are available at www.fitchratings.com or by clicking the links above.
Key Takeaways
13-Oct-2025 | 14:36 EDT
Read the ratings and outlooks.
13-Oct-2025 | 14:38 EDT
Cities eager to tout privately financed sports stadiums are still spending big through tax breaks, land deals and public financing that shift costs back to taxpayers.
When the deep-pocketed Denver Broncos ownership group announced its plans for a new football stadium in September, city and state leaders applauded its pledge to privately finance both the stadium and a new mixed-use district surrounding it.
But the Broncos’ announcement contained some notable fine print. The multibillion-dollar stadium complex won’t be entirely funded by the team’s owners, which include members of Walmart’s Walton family.
“The project will include city and state support for public improvements,” the announcement noted.
smartcitiesdive.com
By Vicky Uhland
Published Oct. 20, 2025
Takeaways by Bloomberg AI
Bloomberg Markets
By Shruti Singh
October 17, 2025
State and local governments are considering how they can help federal workers and how long they can afford to continue social safety net programs and infrastructure projects.
In Brief:
As the federal shutdown hits 10 days, state and local governments are looking for ways to support their federal workers who are going without pay. They’re also counting their dollars to see how long they can maintain safety net programs.
Lawmakers in Congress could reach an agreement before consequences become too severe. But the Trump administration and Congress have shown a willingness to endure shutdowns. The last federal shutdown took place under President Donald Trump’s first term and broke records when it lasted 35 days. Trump’s first term saw three shutdowns.
governing.com
October 10, 2025 • Jule Pattison-Gordon
Going without federal reimbursement for shutdown costs could force states to cut their own budget priorities.
States are doing what they generally do during a federal government shutdown: continuing to operate programs serving some of the neediest people.
That means schools are still serving federally subsidized meals and states are distributing funding for the federal food stamp program. For now.
If the shutdown drags on and federal dollars run out, states can only keep programs going for so long. States may choose to pay for some services themselves so residents keep their benefits.
But this time, state leaders have new worries about getting reimbursed for federal costs once the federal spending impasse is resolved. That’s traditionally been the practice following a shutdown, but the Trump administration’s record of pulling funding and targeting Democratic-led states has some officials worried about what comes after the shutdown.
stateline.org
By: Kevin Hardy
October 9, 2025
Fitch Ratings-Chicago/San Francisco/New York-09 October 2025: Fitch Ratings has published its third annual Community Development Financial Institution (CDFI) Peer Credit Analysis, covering five years of audited data for 40 CDFI loan funds over fiscal 2020-2024. The report finds resilient credit profiles, with low delinquencies and losses, stable profitability and rising equity supporting financial strength.
As interest rates remain elevated and potential cutbacks and lags impact federal funding, Fitch expects shifts in funding mix and higher cost of funds. Fitch believes sector fundamentals and prudent risk management will continue to anchor credit strength.
CDFI balance sheets expanded over the past five years, with loans and equity rising faster than debt, keeping leverage in check. Equity growth has outpaced debt for many peers, lowering debt-to-equity ratios and supporting capital flexibility. Demand for affordable housing and community development loans remains strong amid tighter bank lending standards and weak affordability. Equity cushions will help support new funding sources, which are likely to lift costs of funds.
CDFI asset quality compares favorably with banks. Non-performing loans remain modest and net charge-offs low, reflecting active servicing, early interventions and loss mitigation. A prolonged federal funding disruption could delay or constrain certain grant disbursements or program approvals, pressuring near-term liquidity and timing of originations for some CDFIs. However, Karen Fitzgerald, Fitch Senior Director, U.S. Public Finance, notes that, “Sector liquidity, equity-to-assets ratios well above banks and conservative balance sheet management provide cushions against temporary funding volatility.”
Fitch’s latest CDFI Peer Credit Analysis is available at www.fitchratings.com.
Key Takeaways
The U.S. mass transit sector outlook remains stable, underpinned by supportive dedicated tax revenue growth — often exceeding drops in fare revenue — combined with operators’ proactive adjustments to service levels and expenses that have helped restore fiscal balance in operating funds. This stabilizing credit trend is largely attributable to robust tax support and a historical trend of political support, demonstrated through both revenue growth and ongoing financial commitments from regional stakeholders. However, economic headwinds and the potential of waning political support could pressure ratings in the near term. For more information on S&P Global Ratings’ U.S. economic outlook, see “Economic Outlook U.S. Q4 2025: Below-Trend Growth Persists Amid A Swirl Of Policy Shifts,” Sept. 23, 2025.
13-Oct-2025 | 14:36 EDT
Also today: Mapping a way out of the US housing affordability crisis, and the political transformation of California’s billionaire mall king.
While transit agencies in cities from San Francisco to Philadelphia continue to struggle to match pre-Covid passenger counts, Vancouver’s regional TransLink system has become a success story: Ridership has recovered to around 90% of 2019 levels, at a rate faster than almost any other major transit system in North America.
TransLink’s CEO Kevin Quinn credits the success to several key strategies that make Canadians stand out from their US counterparts, including prioritizing frequent service and implementing land-use policies that promote dense development around transit stations. Population growth in nearby municipalities, fueled by immigration, also plays a role. In a conversation with contributor David Zipper, Quinn — a transplant from Maryland —reflects on the lessons Vancouver offers to other North American cities.
Bloomberg CityLab
By Arvelisse Bonilla Ramos
October 9, 2025
Dan Close, Nuveen head of municipals, joins ‘The Exchange’ to discuss if municipal bonds can remain a safety play, if there are areas within municipals more attractive than others and much more.
cnbc.com
Fri, Oct 10 2025
The Moment is Still Here
Last week, we highlighted that municipal bonds were having a moment—and that remains true as we begin the first full week of October. Tax-exempt yields continue to hold near their mid-September levels, offering compelling relative value compared to the late-September lows. The Bloomberg Municipal Bond Index, a proxy for tax-exempt yields, closed at 3.64% on Friday, up 10 basis points from a recent low of 3.54% on Sept. 17, underscoring the attractive entry point currently available in the market at this “moment”.
advisorhub.com
by Tom Kozlik, HilltopSecurities
October 6, 2025
The municipal-bond market just clocked its best month of returns since December 2023 — and one investing giant in the space says that momentum will continue through the end of 2025.
BlackRock Inc.’s Pat Haskell, who serves as head of municipals, said US state and local debt should do particularly well as this year’s record surge of supply begins to dry up in November and December.
This year’s heavy issuance has at times weighed on performance this year. Muni bonds have underperformed US Treasuries year-to-date, returning 2.9% while Treasuries have returned about 5.5%, according to Bloomberg indexes.
Bloomberg Markets
By Erin Hudson
October 8, 2025
Fitch Ratings-New York/San Francisco-01 October 2025: A brief U.S. government shutdown is unlikely to affect most U.S. public finance (PF) credits, Fitch Ratings says. However, a prolonged shutdown could have negative credit ramifications for USPF issuers, especially those dependent on federal healthcare, housing, and higher education funding. Federal budgets directly support many functions carried out by states, local governments, and not-for-profit entities, and federal spending drives economic activity that underpins public finance credit quality.
Medicaid, which comprises roughly one-third of total state budgets, and Medicare are not funded through annual appropriations and therefore their funding is unaffected by a government shutdown. These programs account for over half of not-for-profit hospitals’ payor mix.
The Federal Highway Administration’s Highway Trust Fund (HTF), a dedicated funding source for federal highways and transit programs, is funded by gasoline and fuel taxes and is not subject to annual appropriations. HTF funds are expected to continue to flow to states to repay GARVEE bonds. GARVEE bonds also benefit from structural safeguards, and many issuers pre-pay debt service a year in advance.
Non-essential employees have been furloughed or required to work without pay, although the Government Employment Fair Treatment Act of 2019 requires deferred federal salaries be paid after a shutdown. It is unclear if certain federal employees will see permanent changes to their employment or pay status. If there are permanent staff reductions, localities with the highest proportion of federal employment are likely see lasting declines in tax revenues.
An extended federal government shutdown would exacerbate existing pressures on tax revenues and could create additional service demands in the District of Columbia (AA+/Stable). The federal continuing resolution passed in March 2025 allows advance appropriation of local funds for fiscal 2026 and 2027, enabling the District to continue operations during a shutdown.
The macroeconomic impact of a shutdown is limited in the near term. However, a protracted disruption, particularly if accompanied by significant funding withdrawals or workforce reductions, could slightly slow U.S. economic growth. Discretionary federal spending totalled $1.8 trillion in 2024, or about 6.0% of GDP, according to the Congressional Budget Office. A little more than half of this was non-defense discretionary spending. Fitch’s USPF ratings account for normal economic cycles, and states’ fiscal 2026 budgets anticipate slower economic growth.
Most state and local government ratings assume sufficient flexibility to address federal funding reductions, primarily through their own spending cuts. This reflects their significant autonomy within the U.S. federal structure. Local governments also bear the risk of absorbing state cutbacks after federal reductions, but they typically have broad budget tools and reserves to manage unforeseen developments.
Many states and local governments currently benefit from high reserves and solid liquidity, reflected in Fitch’s generally robust assessment for governments’ financial resilience and high credit ratings. But reserve and liquidity levels may decline, particularly for governments with lower financial resilience assessments, if governments are unable to quickly adjust to slower economic growth and shifts in federal spending priorities. Weaker sovereign public finances and federal spending cuts could diminish the reach and effectiveness of countercyclical actions, leaving USPF issuers vulnerable to a slowdown.
Revenue-supported entities are generally well-positioned to absorb the effects of reduced federal funding. However, an extended spending pause could negatively affect credits that rely on federal funding for certain programs, including those for housing, higher education, and public transit. Backfilling lost federal funds with own-source resources could affect operating performance over time.
The shutdown could also cause non-material operational disruptions at airports if non-essential Federal Aviation Administration and Transportation Security Administration workers are furloughed, although financial risk remains very low. Airport capital projects could be delayed if federal grant funding is held up.
Fitch Ratings-New York/Chicago-01 October 2025: Fitch Ratings published an exposure draft for proposed revisions to its “U.S. Public Finance Charter School Rating Criteria” on Aug. 4, 2025. The comment period for feedback on the draft criteria ended on Sept. 30, 2025.
Fitch is reviewing feedback received on the draft criteria. The agency expects to address comments and publish the final criteria following the close of the comment period. Fitch will publish all written responses received by the end of the comment period, including the respondent’s name, unless the response was clearly marked as confidential.
The exposure draft outlines proposed changes to Fitch’s methodology for assigning Issuer Default Ratings (IDRs) and instrument ratings to U.S. charter schools. Charter schools offer K–12 education under authorized charters, providing curriculum choice and school-level operational flexibility while remaining accountable to performance and compliance standards. The criteria address demand and enrollment dynamics, financial resilience and liquidity, leverage and debt structure, governance effectiveness and charter renewal risk, and legal and security frameworks supporting operating continuity and bondholder protections.
The Fed’s scheme to offer credit to states and municipalities was fiscal policy in disguise, turning local mismanagement into a national problem.
ive years ago, The CARES Act authorized the Federal Reserve to create emergency lending facilities in the name of aiding the US economy during the COVID-19 economic downturn. In a 2021 appraisal of the Fed lending facilities, several AIER Sound Money Project (SMP) scholars observed:
Although some facilities likely helped to promote general liquidity, others were primarily intended to allocate credit, which blurs the line between monetary and fiscal policy. These credit allocation facilities were unwarranted and unwise.
One such facility was the Municipal Liquidity Facility (MLF), which loaned money to state and local governments. In my recent AIER White Paper “Enabling Bad Behavior,” I examined the two entities that took loans from the MLF: the State of Illinois and the New York Metropolitan Transportation Agency (MTA). I find that, while the MLF loans do not show any effect on the fiscal health of these entities during or after 2020, the MLF distorted the boundary between fiscal and monetary policy.
thedailyeconomy.org
by Thomas Savidge
October 2, 2025
he U.S. Department of the Treasury has released new guidance (PDF) on how communities should prepare to close out their American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF) awards.
Per statute, recipients must continue reporting on their SLFRF projects through 2027, even after funds are fully spent. However, Treasury has now introduced an early closeout option, a long-requested capability that NLC has consistently advocated for on behalf of municipalities nationwide.
As a reminder, closeout is not the same as being administratively closed in the reporting portal. Administrative closure occurs when a municipality misses a reporting deadline, and Treasury staff automatically lock the portal for that period. Past reporting portals cannot be reopened, but all reports are cumulative and continue forward.
National League of Cities
by Dante Moreno
October 2, 2025
The alternative is taxation and greater deficits
Climate week just concluded in New York City. Instead of joining the chorus on how the US has withdrawn from the conversation, I thought I might write about something constructive. I have always worried that climate losses will eventually be socialized via greater deficits and eventually via greater taxation. What might an alternative look like? A private sector funded financing vehicle that can transfer risk from victims to a more risk loving investor, in exchange for appropriate returns. That is, something like CAT bonds.
How do CAT bonds work?
For those who may not be familiar, CAT bonds are effectively insurance on tightly defined catastrophic climate events. The actual structure is a bit complicated. An SPV (special purpose vehicle) is formed by an insurance company. Investors pay let’s say $100 million to the SPV. This money will be used to pay out insured parties should the insurance company have to pay up if disaster strikes. Let’s say the disaster is a 7.0 earthquake in a specific tightly defined region. The cash that comes in from investors is usually invested in US treasuries, which pay say 5% per annum.
The insurance company hands off the premiums it receives from selling coverage of $100 million to the SPV. Let’s say that the premium is 6.5% on $100 million. The cumulative returns of 6.5% plus 5% on T-bills invested is passed on to investors every year till the disaster strikes. If disaster does not strike, the $100 million is returned to CAT bond investors at the end of the pre-arranged term, say at the end of three years. If the earthquake of 7.0 or higher does strike, the insurance company pays off the $100 million to insured parties.
Forbes.com
By Shivaram Rajgopal, Contributor
I am the Kester and Brynes Professor at Columbia Business School and a Chazen Senior Scholar at the Jerome A. Chazen Institute for Global Business.
Sep 29, 2025, 07:13pm EDT
In many communities at high risk for natural disasters, a Wall Street financing tool that’s gaining popularity, called a catastrophe bond, may make it easier for homeowners to get insurance. On Oak Island, North Carolina, homeowners who face annual hurricane risk are seeing the impacts firsthand.
The interest in catastrophe bonds comes as insured property losses increased from $30 billion in 2015 to over $110 billion in 2024, adjusted for inflation, the Insurance Information Institute found, while homeowner insurance premiums increased 40% faster than inflation between 2017 and 2022, according to the Consumer Federation of America. Many insurance companies have left high-risk markets altogether.
Catastrophe bonds are contingent on whether or not a disaster takes place. Insurance companies sponsor bonds that are then purchased by investors, typically institutional investors. If a natural disaster does not take place, investors get a return on their investment. But if a disaster meeting certain thresholds takes place, money goes to insurance companies to pay out customers’ claims, and investors lose money. Catastrophe bonds are beneficial to insurers because they make large amounts of capital available to pay insurance claims. The bonds are appealing to investors because disasters that lead to insurance payouts are rare.
CBS News
By Seiji Yamashita, Ash-har Quraishi
September 30, 2025
01-Oct-2025 | 17:14 EDT
Fitch Ratings-New York-30 September 2025: U.S. public power and electric cooperative’s capital spending surge will present capital planning and financial management challenges, echoing pressures last seen over a decade ago. Maintaining credit quality and ratings through this capex cycle will require effective cost management and disciplined rate setting, Fitch Ratings says.
Fitch estimates capital spending will nearly double over the next four years compared to the past four years, accelerating a trend that began in 2023. Utilities are ramping up investments to address growing demand and improve grid resiliency amid higher material and labor costs.
Public budgets, ongoing disclosures, and issuer projections indicate that spending will likely accelerate in 2025 and achieve record levels over the next three years. Aggregate and average annual spending will likely grow over 25% YoY over the next two years, peaking in 2026 at more than $34.6 billion and $291 million, respectively. Spending should moderate slightly to $30.9 billion and $260 million in 2028. Transmission investment will remain a significant component of capital plans. An even greater share of committed capital will be directed toward new generating capacity, particularly natural gas-fired capacity.
Water sector groups are reacting favorably to the reintroduction of the Water Infrastructure Resilience and Sustainability Act. The bipartisan legislation would fund upgrades to drinking water, wastewater and stormwater infrastructure and make them more resilient against threats ranging from cyberattacks to extreme weather.
The bill was introduced in the House of Representatives last month by Rep. David Valadao (R-Calif.), Rep. Salud Carbajal (D-Calif.), Rep. Jeff Van Drew (R-N.J.), Rep. Troy Carter (D-La.) and Rep. Brian Mast (R-Fla.). The Water Infrastructure Resilience and Sustainability Act would reauthorize the following three water infrastructure resilience programs from Fiscal Year 2027 to Fiscal Year 2031 at current authorization levels:
Water Finance & Management
by WFM Staff
October 6, 2025
FEMA is stretched thin, a GAO report warns. Its author offers advice for local leaders to respond strategically and build resilience now.
The Federal Emergency Management Agency has long been the insurance policy cities rely on when disaster strikes. But with its workforce shrinking and a new federal push to shift responsibility for disaster preparedness and recovery to state and local governments, that safety net is starting to fray, according to a U.S. Government Accountability Office report released earlier this month.
Local governments need to prepare now for the possibility of less support when the next hurricane, flood or wildfire hits, said the report’s author, Chris Currie, a director with GAO’s Homeland Security and Justice Team, in an interview.
When the 2025 hurricane season began on June 1, only 12% of FEMA’s incident management workforce was available to respond to disasters because most staff members were already in the field supporting more than 91 major disasters and emergencies across the country, the report states.
smartcitiesdive.com
by Robyn Griggs Lawrence
Sept. 30, 2025
Takeaways by Bloomberg AI
Competition is heating up in the rapidly growing arena of municipal-bond exchange-traded funds.
The Vanguard Tax-Exempt Bond ETF (ticker VTEB) now has $39.9 billion in assets after drawing in $4.3 billion so far this year, according to data compiled by Bloomberg. That has nudged it just past the $39.4 billion iShares National Muni Bond ETF (ticker MUB), which was long the largest fund in the category.
Bloomberg Markets
By Shruti Singh and Amanda Albright
October 3, 2025
When it comes to building a fixed income portfolio, it’s all about balancing risk and reward. In this case, it’s the amount of yield you’re getting in exchange for the amount of credit and duration risk. Finding the right combination is crucial to minimizing losses, maintaining stability, and achieving a sufficient yield. Sometimes, the market manages to hand investors a gift that allows them to reduce their risk while increasing their returns.
Today, that proposition exists in the world of taxable municipal bonds.
Investors often ignore taxable munis in favor of their tax-free sisters. That’s a real shame, considering today, taxable munis could offer a better return potential than traditional corporate bonds. With them, they can find the holy grail of reducing credit risk while still offering a top yield.
dividend.com
by Aaron Levitt
Oct 01, 2025
Takeaways by Bloomberg AI
The steady drum beat of federal funding threats totaling billions of dollars is renewing municipal investors’ qualms about lower-rated state and local borrowers.
President Donald Trump’s administration has frozen $18 billion in infrastructure dollars for New York City and another $2.1 billion for rail projects in Chicago, viewed as a bid to use the government shutdown to punish political opponents. His administration said in September it plans to redirect $2.4 billion intended for transit in California to other projects. Earlier this year, his administration temporarily stalled billions in education funding intended for schools nationwide.
Bloomberg Markets
By Shruti Singh
October 6, 2025
Takeaways by Bloomberg AI
Citadel Securities has begun processing trades for small and mid-tier banks in a partnership aimed at providing them better pricing on fixed-income securities, according to President Jim Esposito.
“I think there are probably a hundred banks around the globe that want to service their end-user client in markets, jurisdictions, in places we’re never going to touch,” Esposito said in a Bloomberg TV interview from the sidelines of the firm’s conference on Monday.
Bloomberg Industries
By Katherine Doherty
October 6, 2025 at 12:00 PM PDT
Municipal bonds have made their opening move. After months of being labeled “cheap,” the tax-exempt market responded with a rally across the full curve. Yields dropped, ratios tightened, and early investors saw results. But if you missed the first wave, don’t worry. There’s still opportunity ahead, especially for those focused on what’s next.
Munis may not grab headlines, but their quiet consistency and tax advantages could make them a smart choice for investors seeking stability and income, especially in today’s market. This isn’t a “get out” moment. It’s a “stay and enjoy the yield” one. For many investors, it’s a chance to rethink how munis fit into your portfolio and capitalize on the value that remains.
Going long still makes sense
Even after the rally, the municipal bond curve remains historically steep. Investors can still earn significantly more income by moving into longer maturities, especially in high-quality bonds.
Fortune
by Paul Malloy
Sat, October 4, 2025
Falling yields lifted bond returns and rewarded patient investors.
At the close of 2025’s third quarter, all major fixed-income Morningstar Categories showcased positive returns, but it wasn’t a smooth-sailing ride.
In July, the 10-Year Treasury yield hovered between cycle highs of 4.35% and 4.45%, and credit spreads widened due to higher-than-expected inflation numbers and political uncertainty. However, as the quarter progressed, the market sentiment shifted from caution to renewed optimism. Treasury yields decreased across the curve, and in September, the Federal Reserve reduced its overnight borrowing rate for banks by 25 basis points, reinforcing expectations for further policy support. While yields fell, the Treasury yield curve steepened during the quarter, with short-term yields falling more than long-term rates, signaling investor caution about the long-term economic outlook. Meanwhile, credit-sensitive sectors staged a rebound, and almost all fixed-income sectors promptly gained back their July losses. The Morningstar US Core Bond Index, a proxy for the US-dollar-denominated investment-grade bond market, gained 2.04% during the quarter.
In what turned out to be a volatile quarter, investors who took reasonable duration and credit risk were rewarded in the end. A typical long-term bond Morningstar Category fund, which invests in long-dated investment-grade corporate and government debt and carries a duration of 11.2 years, gained 3.66% during the quarter.
morningstar.com
by Saraja Samant
Oct 2, 2025
Yields are Higher & Investment Dollars are Flowing into Municipal Funds
Municipal bonds are no longer flying under the radar. Their value is gaining widespread recognition as investors respond to a rare combination of attractive yields, strong credit fundamentals, and tax-efficiency. The recent surge in demand reflects a growing awareness that U.S. municipal bonds are well-suited to meet a range of investment goals—particularly in today’s environment of economic and political uncertainty.
advisorhub.com
by Tom Kozlik, HilltopSecurities
October 1, 2025
Overview
– 2025 municipal bond market saw $3.3B Q2 outflows but shifted to $5B inflows in long-duration munis as investors hedge macro risks.
– Fed easing and steepening yield curves boosted long-muni appeal, with high-grade bonds offering tax-equivalent yields rivaling corporates.
– Record 2024-2025 municipal issuance and active management needs highlight market dispersion, as strong states like Texas outperform weaker jurisdictions.
– High-yield muni funds like FEHIX (4.43%) outperformed benchmarks, but trade uncertainties and tax law changes pose ongoing challenges.
– Analysts advise selective credit analysis, favoring diversified municipalities with strong demographics over those with pension liabilities or population decline.
ainvest.com
Written by Isaac Lane
Friday, Oct 3, 2025
In this week’s episode of WSJ’s Take On the Week, co-hosts Gunjan Banerji and Telis Demos explore how the Federal Reserve’s independence, a government shutdown and volatility around tariffs are driving gold to hit record highs. Then, does videogame maker Electronic Arts’ $55 billion buyout signal a long-awaited M&A boom? Plus, they discuss the “debasement trade” and how concerns over the U.S. dollar are also fueling a rally in bitcoin ETFs issued by firms like BlackRock.
Then after the break, Gunjan sits down with Neene Jenkins, head of municipal research at JPMorgan Asset Management, to dive into municipal bonds, which are used to fund infrastructure, highways, sewer systems and school districts. Is higher education issuing more debt because of federal challenges? Later, they discuss the sector’s resilience to government shutdowns, and Jenkins answers a key question: How likely is a recession?
THE WALL STREET JOURNAL
SUNDAY, OCTOBER 5, 2025
Ratings are forward-looking opinions about creditworthiness of issuers and obligations. Beyond mere symbols, each rating reflects a multi-dimensional view of credit–indicating a common and transparent global benchmark for investors and market participants in their decision-making processes.
For an issuer, the rating represents our assessment of the obligor’s capacity and willingness to meet their financial commitments as they come due. This rating is a relative ranking of creditworthiness. Higher ratings, such as those in the investment-grade spectrum (‘BBB-’ and above), reflect our expectation that these borrowers are more likely to be able to meet their obligations during stress events compared to lower-rated issuers.
Comparatively, speculative-grade ratings (‘BB+’ and below) carry a higher risk of borrowers failing to meet their obligations and are more at risk to adverse events. A failure to meet financial obligations is classified as a default. The relative likelihood of default is based upon the ratings scale, regardless if a rating is on public or private credit.
24-Sep-2025 | 10:46 EDT
S&P Global Ratings’ ratings on U.S. states remain stable, following a few years of better-than-expected economic conditions, revenues exceeding forecasts, and reserves built-up and maintained at or near all-time high levels. S&P Global Ratings Economics expect the U.S. economy to grow in 2026 and 2027 (GDP 1.8% each year) and unemployment to peak at 4.6% by mid-2026, typically viewed as relatively benign economic conditions. (For our latest economic forecast see “Economic Outlook U.S. Q4 2025: Below-Trend Growth Persists Amid A Swirl Of Policy Shifts,” Sept. 23, 2025.)
However, we anticipate rising pressures on state credit quality during the same period, partly from state-level policy changes, such as maintaining expanded Medicaid benefits following the pandemic or recently enacted tax rate reductions. Furthermore, financial pressure could result from the changing relationship that states have with the federal government.
Policy change at any level of government can lead to uncertainty, which often leads to greater difficulties in budgeting on both the revenue and expenditure sides of the ledger. As uncertainty persists, we have received questions from issuers and investors on how it could influence state budgets and states’ overall financial health.
24-Sep-2025 | 11:28 EDT
This is the U.S. Public Finance Rating Action Report 2025 Year to Date (1 January to 26 September).
Mon 29 Sep, 2025 – 4:17 AM ET
This study analyzes the status of US public pension systems, covering over 90% of public pension assets across states, cities, and counties. At the close of FY 2023, total reported net pension liabilities were approximately $1.65 trillion, with unfunded liabilities continuing to exceed the size of the US municipal bond market. To stabilize pension systems, state and local governments would need to contribute an additional $96 billion annually.
Key Takeaways
The Hoover Institution
By: Oliver Giesecke
September 29, 2025
Across major U.S. cities, the long tail of the pandemic continues to reshape commercial property values and the budgets that depend on them. Nowhere is this more visible than in the offices that once served as the backbone of urban tax bases. The sharp decline in valuations has left municipal finance directors juggling budget forecasts, property owners challenging assessments, and homeowners increasingly shouldering the difference.
In New York, office buildings have lost roughly $29 billion in assessed value between 2021 and 2025, a plunge of around 16 percent when adjusted for inflation. That slide has translated into a $1.16 billion shortfall in property tax receipts, with more than 90 percent of the hit coming from office properties. Vacancy levels remain about twice what they were before the pandemic. Even so, the impact on the city’s $112 billion budget has been muted. Property taxes now make up a smaller share of revenue while personal and business income taxes, which have grown more quickly than inflation, fill the gap. The trade-off is volatility: those revenue streams rise and fall faster with market cycles than stable property taxes. Budget officials acknowledge the shift leaves the city more exposed to downturns, though rating agencies point to the city’s still-healthy reserves and the possibility of new levies under a future administration as cushions against deeper fiscal pain.
Washington, D.C. illustrates what happens when federal belt-tightening collides with a shaky office market. Local budget projections already anticipate office property tax receipts falling by nearly 10 percent in 2025 and another 12 percent in 2026. Officials warn that the rising tide of vacancies could weaken finances further as the city absorbs spending cuts triggered by federal tax reforms and other policy changes. To plug the gap, the Bowser administration is weighing sales tax hikes and new gambling levies. Economists at the city’s Office of the Chief Financial Officer are blunt: real estate taxes will no longer be the primary driver of local revenue, meaning more reliance on sales and income taxes and, with it, more volatility. Programs will have to compete more directly for scarce dollars as the revenue mix shifts.
propmodo.com
By Travis Barrington
Sep. 24, 2025
Some states aren’t disclosing all their costs, masking whether budgets are truly balanced.
Half of American states do not have enough funds to pay their bills, according to a new analysis released Thursday.
The nonprofit Truth in Accounting, which advocates for more transparency in public finance, released its Financial State of the States report. It concluded that 25 states were unable to cover all their financial obligations at the end of fiscal year 2024, which for most states ended June 30.
While every state but Vermont mandates a balanced budget, the report says elected officials often exclude certain costs such as future pension obligations and deferred maintenance from their budget calculations.
stateline.org
By: Kevin Hardy
September 25, 2025
Here, we answer investor questions about the fiscal standing of the states that are among the largest municipal bond issuers.
Key Takeaways
As investors consider the performance of the municipal bond market going into the fourth quarter of 2025, we believe there are many positive factors to note. Year to date through September 12, the Bloomberg Municipal Bond Index (muni index) returned 2.70%. Starting yields on municipal bonds remain attractive; the muni index yield at that date stood at 3.56%, representing a 6.0% tax-equivalent yield. Longer-dated municipal bonds (maturities of 22 years or greater) yielded 4.6%, or about 7.8% on a tax-equivalent basis. (Tax-equivalent yields based on the top 40.8% tax rate.)
Clearly, the asset class retains its appeal for investors seeking tax-free income. Against that backdrop, however, we continue to receive questions about the overall fiscal health of U.S. states, the major issuers of general obligation municipal bonds. We are also asked about the state and local governments that are among the largest individual issuers within the asset class. Here, we will address these questions and offer some observations about their implications for investors.
lordabbett.com
By Richard T. Gerbino, Roman Schuster, Brandon J. Crofton
September 24, 2025
Fitch Ratings-New York/Austin-25 September 2025: A repeal of skilled nursing facilities (SNF) minimum staffing standards would reduce the risk of potential new cost pressures on U.S. life plan communities (LPCs) with SNFs, Fitch Ratings says.
The Centers for Medicare and Medicaid Services (CMS) have drafted an interim final rule that would repeal the 2024 rule establishing minimum skilled nursing staffing ratios, although details remain unclear. Congress postponed implementation of the 2024 rule until 2034 as part of the 2025 tax and spending bill.
LPCs with significant SNF services have limited ability to raise rates given their exposure to government payors. Government reimbursement rates, particularly Medicaid rates, have not kept pace with heightened expenses related to staffing SNFs.
Fitch Ratings’ 2025 peer credit analysis report compares recent financial performance of retail and wholesale water and sewer systems. The ratios highlighted include some of the financial calculations used to compare utility systems during Fitch’s committee process and can assist market participants in making their own comparisons. Financial metrics represent only one key component of Fitch’s utility credit analysis. To view Fitch’s full water and sewer criteria, see “U.S. Water and Sewer Rating Criteria.”
Wed 24 Sep, 2025 – 10:39 AM ET
Washington, D.C. — The National League of Cities (NLC) today released its 2025 Municipal Infrastructure Conditions Report, providing the most up-to-date look at how cities, towns and villages across the country are funding, prioritizing and managing critical infrastructure projects.
Drawing on survey data, the report highlights the infrastructure investments municipalities say are most vital to supporting public health, safety and economic growth.
Key Findings from the Report Include:
Water systems, roads and bridges rank as the top three infrastructure priorities for over 70% of municipalities.
“Local leaders are on the frontlines of keeping water systems safe, roads and bridges functional and communities connected,” said Clarence E. Anthony CEO & Executive Director of the National League of Cities. “The Municipal Infrastructure Report shows how cities, towns and villages of all sizes are innovating in the face of rising costs and complex permitting processes to deliver the infrastructure residents depend on for a thriving community.”
The report also underscores how infrastructure investments are linked to broader community goals — from affordable housing development to climate resilience and economic inclusion.
Access the full report and learn more.
September 23, 2025
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The National League of Cities (NLC) is the voice of America’s cities, towns and villages, representing more than 200 million people across the country. NLC works to strengthen local leadership, influence federal policy and drive innovative solutions. Stay connected with NLC on Facebook, X, LinkedIn and Instagram.
Transportation Secretary Sean Duffy joined the inaugural meeting of the Department of Transportation Advisory Board earlier this summer at the White House. Overall, the meeting was extraordinarily promising for American transportation P3s. Again and again, Secretary Duffy mentioned the need to find ways to leverage private investment and create projects that attract private capital, and he wants to reform things quickly. He told the Board that “the mission is speed. We’ve got to do this fast.”
However, right out of the gate, the Secretary mentioned a more surprising concern: “In a number of our projects, what we see is opportunity for private capital. And often times…it’s frustrating because it’s a lot of foreign private capital. And it seems like there’s some pretty good returns that they’re making on American infrastructure. It’d be great if we were able to get American private capital into American infrastructure and see those returns go to American investors. I don’t think we’ve done a very good job of that thus far.”
Foreign investors – it seems they’re a problem in every country. American voters want American firms and funds to develop American infrastructure. The same goes for every other country, or Texans for Texas and so on. Dismissing that sentiment as narrow parochialism, however, can lead one to neglect the very real political risk that it creates. People, and the politicians they elect, simply tend to see infrastructure as a more zero-sum transaction when foreign firms are investing.
Public Works Financing
July 2025
America’s public schools’ financial health is deteriorating even as they are borrowing from debt markets at a frenzied pace. Bloomberg’s Erin Hudson explains more with Bloomberg’s Scarlet Fu on Bloomberg Markets.
Bloomberg Markets – Muni MomentTV Shows
September 25th, 2025, 11:46 AM PDT
The use of private activity bonds (PABs) to finance affordable multifamily housing continues to set records, making the pending decrease in the financed-by test a likely way to further maximize the resource.
The Council of Development Finance Agencies (CDFA) released the CDFA Annual Volume Cap Report last week, the first such report in three years. The report covers PAB issuance for calendar years 2021-2023.
Multifamily PAB issuance set a record of $21.67 billion in 2023, continuing a nearly decadelong increase in such use. For comparison, only $6.60 billion in PABs were reported for multifamily housing issuance in 2015, the last year before a steady increase in issuance. Even beginning in 2016–when multifamily PAB issuance jumped to $14.00 billion–the compound annual growth rate (CAGR) from 2016 to 2023 for such PAB issuance was 6.44%. Over the same period, the CAGR for inflation was barely half that, at 3.36%.
Novogradac
Published by Peter Lawrence on Wednesday, September 24, 2025 – 10:45AM
The Opportunity Zone (OZ) program, a national model to spur private investment of housing in underserved areas, has been extended by Congress beyond 2026, marking a significant opportunity for real estate professionals. This innovative initiative not only helps rebuild communities but is a win-win for residents, property developers, and investors. The program’s success in transforming economically distressed areas has proven its value, making it crucial for industry leaders to continue supporting it.
Opportunity Zones originated through the Tax Cuts and Jobs Act of 2017, a market-driven mechanism to channel private capital into America’s economically disadvantaged communities. The program designates particular census tracts where private investors can defer, reduce, and potentially eliminate capital gains taxes by deploying their investment capital to qualified housing projects. For investments held beyond the 10-year mark, appreciation becomes entirely tax-exempt, and depreciation is not recaptured at sale, creating a powerful incentive for “patient capital.”
This tax framework departs from traditional community development approaches and allows urban revitalization without direct government subsidies. In less than a decade, OZs have reversed the downward trajectories in many targeted communities by allowing private stakeholders to do the heavy financial lifting.
Urban Land
By Brad Vogelsmeier
September 22, 2025
St. Louis’s tornado was months ago, but it’s still waiting for hundreds of millions in federal recovery funds to arrive. It’s part of Trump’s plan to shift responsibility to the states and shrink the agency.
ST. LOUIS—Minutes after a mile-wide tornado struck this city on an otherwise beautiful day this spring, Ali Rand heard her husband shout as he surveyed the devastation surrounding their tony neighborhood of historical homes. “Everything is gone,” Rand, 38, remembers him saying.
The tornado, packing winds of 152 miles an hour, hit the city with blunt force, killing five people. In the weeks following the storm, Rand and other private citizens mobilized teams of residents whose neighborhoods had been destroyed to clean up debris, remove fallen trees and rebuild shattered homes.
Largely missing from the recovery efforts, according to Rand, city officials and other residents: the Federal Emergency Management Agency.
“I’ve never seen someone from FEMA out on the streets,” Rand said.
That is by design.
The Wall Street Journal
By Scott Patterson and
Tarini Parti
Sept. 28, 2025 9:00 pm ET
Overview
– Q2 2025 municipal bond market faces pivotal shifts due to Fed rate cut signals, credit divergences, and macroeconomic risks.
– Strategic duration management gains traction as long-dated munis offer tax-equivalent yields exceeding 5% for top tax bracket investors.
– Credit selection emphasizes geographic diversification, favoring fiscally strong states like Texas while avoiding underfunded pension jurisdictions.
– Macroeconomic tailwinds from potential TCJA expiration and yield curve steepening contrast with tariff risks requiring sector-specific risk adjustments.
ainvest.com
Written by Cyrus Cole
Tuesday, Sep 23, 2025
Spline Data’s third major data product produces machine-learning-derived new issue scales on demand
CHICAGO, Sept. 24, 2025 /PRNewswire/ — Spline Data, a leading provider of quantitative U.S. municipal bond pricing data and analytics, today announced the launch of its real-time primary market pricing tool designed to bring greater efficiency, accuracy, and customization to the bond issuance process.
Spline’s latest analytics tool provides dealers, advisors, issuers, and asset managers with next-generation modeling technology to generate predicted scales for hypothetical municipal bond deals across any range of call dates, coupons, and structures. Using traditional municipal trading intuition combined with scalable machine learning, Spline’s new issue platform leverages swaths of otherwise ignored market data to generate meaningful insights, enable fine-tuned pricing power, and enhance negotiation capabilities.
The municipal-bond market’s biggest underwriter expects an increase in debt sales in October after the asset class saw state and local government borrowing slow this month.
Bank of America Corp. strategists led by Yingchen Li and Ian Rogow are forecasting municipal issuance of $58 billion in October, according to a research note published Friday.
Strategists at the firm, which is the top underwriter of state and local debt, are expecting the market to resume its busy pace of debt sales. Muni bond sales are on track to fall about 6% this month compared to the prior year, with issuance totaling $44 billion so far, according to data compiled by Bloomberg. Some municipalities may have held off on borrowing in September in the hopes that the Federal Reserve would cut interest rates.
Bloomberg Markets
By Faith DiBiagio
September 29, 2025
Key Takeaways
Why This Matters
For many years, pensions have been a drag on credit quality for some U.S. LGs. Over the last two years, however, we have observed improvement in pension costs and funded levels for U.S. LGs (municipalities, counties, and school districts), as detailed in the graphic below. Overall, median pension costs as a percentage of governmental revenues decreased to 4.5% from 4.7% from fiscal 2022 to fiscal 2024, while the funded ratio improved to 80% from 78%.
16-Sep-2025 | 11:09 EDT
Fitch Ratings-Barcelona/Milan/New York-19 September 2025: Fitch Ratings has updated its Rating Definitions, which outline how Fitch defines the ratings it assigns. The main changes include:
— Clarifications to make the fundamental principles underpinning the use of rating Outlooks and Watches more explicit.
— Clarifying edits and simplifications to the obligation rating scale section to evolve the document structure and to make the distinction between probability of default only scales and scales that incorporate recovery considerations clearer.
— Minor editorial changes to improve accuracy, structure and document flow.
Fitch’s full Rating Definitions are available here. For Fitch’s coverage on rating definitions, please click here.
Fri 19 Sep, 2025
Fitch Ratings’ U.S. Higher Education Data Comparator provides ratings and key statistics for all Fitch-rated Public and Private Colleges and Universities. This tool enables clients to compare indicators across different system types, regions, rating categories, and years. The current edition offers a snapshot of the financial status of Fitch-rated Higher Education entities as of September 10, 2025.
Tue 23 Sep, 2025 – 10:10 AM ET
In August 2025, S&P Global Ratings maintained 23 ratings, took four positive ratings actions, and took two negative rating actions in the U.S. not-for-profit health care sector. In addition, we revised the outlooks on five issuers favorably, and one issuer unfavorably, without changing the ratings.
Included in the month’s four positive rating actions was University of North Carolina Rex Healthcare, related to its integration with University of North Carolina Healthcare’s obligated group. Also included in the month’s activity were ratings assigned to 12 new debt issuances for currently rated organizations, all of which were affirmed except for one favorable outlook revision and one downgrade.
The 12 rating actions and outlook revisions consisted of the following:
18-Sep-2025 | 12:08 EDT
What’s going on here?
Several US school districts and local governments raised funds with new municipal bonds this week, but fresh data from ICE Climate Data flagged many of these as having some of the nation’s highest climate risks.
What does this mean?
Municipal bonds from Ocean, New Jersey; Falmouth, Massachusetts; and a handful of school districts in California, Louisiana, and Florida were all tagged with climate risk scores topping 3.9 out of 5. ICE’s scoring system marks anything over 3.0 as severe, meaning these places face significant threats from flooding, wildfires, or hurricanes. Ocean, NJ is the poster child, landing a perfect 5.0 flood risk on its $59 million bond sale. Falmouth, MA and Sulphur Springs, CA also stand out, with wildfire and general risk scores running high. Even large issues like Pinellas County, FL’s $150 million bond aren’t immune with a 3.9 risk reading. These scores blend a range of climate hazards and are catching more eyes among investors—who increasingly want to price in real-world risks to local infrastructure and finances.
Why should I care?
For markets: Climate risk is redefining what investors look for.
Climate data is quickly becoming a critical part of municipal bond investing. With ICE spotlighting high-risk areas, investors aren’t just assessing creditworthiness—they’re focusing on the physical risks that could drive up costs or disrupt communities. As climate disasters become more common, borrowers in high-risk regions may end up paying higher interest—or facing tighter funding terms—to attract buyers comfortable with the added uncertainty.
The bigger picture: Climate resilience is moving up the policy agenda.
Steep climate risk scores are putting American towns and schools on notice: long-term costs from disasters can quickly snowball into major budget strains. The growing focus on these risks is likely to shift how municipalities plan, borrow, and invest—pushing climate resilience and infrastructure upgrades higher up both local and federal agendas, and reshaping priorities from emergency funding to long-range city planning.
finimize.com
Pay-for-success initiatives, public-private collaboration, and environmental markets can deliver numerous benefits
Coastal wetlands—including tidal marshes, forested swamps, mangroves, and seagrasses—are among humankind’s most powerful natural allies. These ecosystems not only absorb and store large amounts of carbon but also protect communities from flooding and wildfires, provide habitat for commercially and recreationally important species, and filter pollutants and excess nutrients from the water. Yet these habitats are disappearing at alarming rates because of sea-level rise, erosion, and development. Further, communities seeking to protect and restore coastal wetlands have struggled to secure the funding needed to meet the scale of the challenge.
To help address these issues, the Blue Carbon Network—a Pew-hosted group that connects state agencies, practitioners, academic researchers, and nongovernmental organizations working on coastal conservation and climate initiatives—coordinated a webinar that highlighted innovative state-led programs and initiatives to finance coastal resilience projects. Experts from Maryland, Louisiana, and Duke University shared information about a variety of successful approaches. One example is emerging environmental markets, which assign monetary values to environmental benefits—such as cleaner air and water, or carbon emission reductions—that then can be bought, sold, or traded to encourage protection and underwrite conservation projects.
The Pew Charitable Trusts
Authors: Jazmin Dagostino
September 17, 2025
The Brookings Institution
Matt Posner and Xavier de Souza Briggs
September 15, 2025
In many corners of the bond market, it can be difficult for investors to find attractive yields. In contrast, municipal bonds still look like a bargain.
The Federal Reserve’s decision earlier this week to cut short-term interest rates poses a threat to income investors. It likely means smaller payouts from CDs, money-market funds, and other yield instruments.
For investors in long-term instruments such as bond mutual funds, the blow is less severe. Long-term interest rates don’t move in lockstep with the short-term federal-funds rate, and when rates do come down, investors can count on rising bond prices to cushion the blow. (Bond prices move in the opposite direction to rates.)
msn.com
Story by Ian Salisbury
Takeaways by Bloomberg AI
Investors poured the most cash into municipal-bond funds earlier this month since at least 2007, according to CreditSights Inc.
That’s as they chased a rally in state and local government debt — driven by expectations that the Federal Reserve will resume cutting interest rates — and rebalanced portfolios as stock prices rose to records.
Bloomberg Markets
By Martin Z Braun
September 22, 2025
Overview
– The 2025 OBBBA Act raises the SALT deduction cap to $40,000, boosting affordability for high-tax coastal states like NY, CA, and FL.
– Tax savings from the expanded cap incentivize luxury real estate demand and municipal bond investments, with muni yields rising to 7.3% for high-income investors.
– 2024 municipal bond issuance hit $507.7B as investors capitalize on tax-exempt gains, while real estate markets in constrained coastal areas see surging demand.
– Strategic allocations combine real estate in high-tax suburbs with long-duration muni bonds, though risks persist as the cap reverts to $10,000 by 2030.
ainvest.com
by Harrison Brooks
Friday, Sep 19, 2025 2:04 am ET
Key takeaways
The high yield muni market is a long-existing, yet often overlooked, segment of fixed income markets. It is typically made up of small issuers, fragmented across industries, is often only mentioned when something goes wrong (e.g., Puerto Rico), and ultimately can be difficult for investors to build portfolios on their own. The reality, though, is investors have often missed out on what has proven to be a market with higher after-tax yields1, and lower default rates than high yield corporates.2 Notably, investors can now implement a thoughtfully constructed portfolio, managed by an experienced team who is well versed in the nuances of this market, all through the efficiency of the ETF wrapper, using the iShares High Yield Muni Active ETF (HIMU).
blackrock.com
Sep 16, 2025 | By Patrick Haskell Ryan McDonald, CFA
Takeaways by Bloomberg AI
A small investor is pushing back against bigger asset managers bringing the sharp-elbowed tactics of the corporate bond world to the normally placid confines of municipal finance.
Stephen McMullin, who manages less than $10 million for Fulcrum Point Capital, took to court this week to object to some of the maneuvering that has gone on around the bankruptcy of Aleon Metals LLC, a Texas recycling company that borrowed money in the municipal bond market.
Bloomberg Markets
By Eliza Ronalds-Hannon and Martin Z Braun
September 18, 2025
Takeaways by Bloomberg AI
Bloomberg Markets
By Elizabeth Rembert and Amanda Albright
September 15, 2025
Summary
– U.S. municipal bond markets show rising volatility in economically disadvantaged regions due to project delays, demographic shifts, and fiscal mismanagement.
– High-yield muni deals face execution risks as delayed infrastructure projects strain budgets and erode investor confidence through regulatory hurdles and operational complexities.
– Demographic challenges like declining populations and weak tax bases amplify default risks, forcing investors to balance elevated returns against potential downgrades.
– Effective risk assessment requires granular due diligence on project timelines, demographic analysis, and leveraging industry expertise from platforms like the Municipal Forum of New York.
– Institutional initiatives such as training programs aim to strengthen fiscal transparency and governance, indirectly mitigating systemic risks in high-yield municipal bond markets.
ainvest.com
by Oliver Blake
Monday, Sep 15, 2025
SIFMA Research tracks issuance, trading, and outstanding data for the U.S. municipal bond market. Issuance data is broken out by bond type, bid type, capital type, tax type, coupon type and callable status and includes average maturity. Trading volume data shows total and average daily volume and has customer bought/customer sold/dealer trade breakouts. Outstanding data includes holders’ statistics. Data is downloadable by monthly, quarterly and annual statistics including trend analysis.
YTD statistics include:
September 11, 2025
Key Takeaways
This report covers retail public power utilities, as well as distribution cooperatives. It also includes combined retail utilities that derive most of their net revenue from electric operations. The report excludes wholesale and generation and transmission cooperatives. The 2025 U.S. public power sector outlook remains negative, where it was placed in 2024. The negative sector outlook reflects our view that NFP public power, electric cooperative, and gas utilities face ongoing exposure related to rising operating expenses and costs of capital investment. Climate change, energy transition, and load growth underlie these cost pressures, affecting utilities and constraining rate-making flexibility. In addition, we revised more outlooks to negative than to stable or positive, due to delayed cost recovery, weakened competitive position, deterioration in financial performance, and due to our evolving view of heightened long-term credit exposure from potential future liabilities and infrastructure costs associated with wildfires in California.
08-Sep-2025 | 12:57 EDT
Key Takeaways
Why This Matters
S&P Global Ratings maintains ratings on approximately 2,000 utilities–of which 40% are considered medium to large systems and 60% are considered small systems. Despite their small size and more limited operations, these entities face the same challenges as their mid-to large-size peers with typically less financial and personnel resources to address them, which could lead to increased credit pressure and rating volatility. The American Water Works Association (AWWA) notes the “unique challenges that small systems face can include funding, staffing, training, and compliance. They may lack in-house technical expertise to address complex issues such as emerging contaminants, climate change impacts, and planning system upgrades.”
10-Sep-2025 | 12:28 EDT
Key Takeaways
08-Sep-2025 | 12:57 EDT
Key Takeaways
— Using probabilistic analysis, we estimate a 90% likelihood that, by 2040, the average global temperature will exceed the Paris Agreement’s goal of 1.5° Celsius (1.5 C) above pre-industrial levels. And there is a 50% likelihood of it exceeding 2.3 C. This suggests that–as a baseline–all sectors, including households, may want to prepare for the impacts of physical climate risks associated with a 2.3 C world.
— If we’re not ready, there’s a 50% chance that economic costs from global warming would accumulate to 9%-33% by 2040. This is our finding after integrating the potential economic impacts of climate change into our probabilistic model. In a more extreme case (90th percentile), the average temperature could be 2.8 C higher than preindustrial levels by that time.
— Yet, globally, climate adaptation and resilience needs remain largely unmet. We believe this is due, in part, to uncertainties and data gaps associated with climate risk modelling, long and costly implementation of adaptation and resilience investments, and greater societal benefits than private benefits, all of which could put such investments on the back burner.
— We believe our probabilistic model supports the assessment of physical climate risks, as well as adaptation and resilience planning, by adding likelihoods to risk portrayed in existing scenario analysis. Our model translates uncertainty regarding energy transition pathways and their impacts on climate change into risk distribution, and provides a simpler way to gauge adaptation needs and potential related losses.
15-Sep-2025 | 07:13 EDT
In the report “Why Planning For A 2.3°C Warmer World Is Critical This Decade And Next,” Sept. 15, 2025, S&P Global Ratings proposed a probabilistic approach to assessing the likelihood of global temperature rise and the economic questions. Using probabilistic analysis, we estimate a 90% likelihood of the average global temperature exceeding the Paris Agreement’s goal of 1.5° Celsius (1.5 C) above preindustrial levels by 2040 and a 50% likelihood of it exceeding 2.3 C. Here we summarize the principal results of our model and the methodology behind it.
A. Probable GMST Outcomes And Associated GDP Impacts
Our modeling of the global mean surface temperature (GMST) indicator incorporates nearly 9,000 emissions scenarios and includes the effects of uncertainty in climate sensitivity (see chart 1, which shows lower-bound GMST values as a function of time at different levels of probability).
15-Sep-2025 | 06:54 EDT
Operations for U.S. not-for-profit LPCs stabilized in fiscal 2024, with improved median occupancy and revenue growth. Liquidity and coverage ratios were stable to improving, driven by stronger cash flow and moderated expense growth.
Wed 10 Sep, 2025 – 10:24 AM ET
Fitch Ratings-Austin/New York-10 September 2025: U.S. Not-for-Profit Life Plan Communities (LPCs) demonstrated continued stabilization throughout 2024, with median occupancy improving across service lines, according to a new Fitch report.
Demographic demand led to sustained high occupancy, which supported revenue and net entrance fee growth, while easing expense pressures improved operating performance. Liquidity and coverage ratios were stable to modestly stronger, aided by improved cash flow, favorable investment results, and more moderate capital spending.
“While the sector has shown meaningful progress over the last year, pressures remain,” said Margaret Johnson, Senior Director at Fitch Ratings. “LPCs with greater skilled nursing exposure face disproportionate strain from higher staffing costs, limited reimbursement, and reduced flexibility to adjust operations. Since the pandemic, these challenges have contributed to heightened rating stress and, in some cases, defaults.”
Fitch Ratings maintains public ratings on 162 LPCs, with 161 included in the 2025 medians, comprising 116 investment grade and 45 below investment grade providers. The median rating is ‘BBB’, which accounts for just over half the portfolio, while the number of below investment grade ratings has risen over the last decade largely due to new issuers rather than downgrades. Type A contract providers remain the largest share at 36%, followed by Types B and C, with Type D rental agreements making up only 4% of the portfolio.
The full report is available at www.fitchratings.com
Key Takeaways
11-Sep-2025 | 14:29 EDT
Key Takeaways
09-Sep-2025 | 11:54 EDT
In this report we present rating actions at the debt type level (e.g., general obligation, sales tax, parking revenue, etc.) rather than at the issuer level. Therefore, an issuer may have multiple rating actions associated with it in different sectors in the tables and charts. Because we present the rating actions at the debt level, the metrics presented may not be comparable to other research published by S&P Global Ratings or by other S&P Global divisions.
This report does not constitute a rating action.
Key Takeaways
12-Sep-2025 | 13:55 EDT
Key Takeaways
16-Sep-2025 | 11:09 EDT
U.S. States’ credit ratings as of September 12, 2025, show stable outlooks for most states, with AAA ratings for Delaware, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Minnesota, Missouri, North Carolina, Ohio, South Carolina, South Dakota, Tennessee, Texas, Utah, and Virginia. Recent rating actions include Alaska upgraded to AA- from A+, Connecticut upgraded to AA from AA-, Maine upgraded to AA+ from AA, and Rhode Island upgraded to AA+ from AA.
Fri 12 Sep, 2025 – 1:40 PM ET
Innovators, investors and practitioners are on the hunt for fruitful applications of blockchain and other evolving financial technology. Undoubtedly some of their ambitions will involve government finance. Which ones might actually pan out?
When bitcoin ignited the cryptocurrency craze back in 2009, most investors and public officials had never heard of the blockchain technology that underlies it, or they knew just enough about it to believe it could soon be the next Internet in terms of its impact. For now, artificial intelligence has displaced the blockchain and “smart cities” as the flavor of the year on Wall Street and in public management, with its potential to enhance operational productivity and even the policymaking process of budget-cutting.
But as blockchain and other forms of advanced financial technology — “fintech” in industry argot — evolve, they are already making inroads into public finance. The challenge is to separate the noise from the signal. More importantly, public officials must also be watchful for those nasty laws of unintended consequences. Technology can be wonderful in driving improvements in public services and financial efficiencies, but its proponents often have a blind eye to unpredictable negative outcomes.
That warrants a closer look at the cutting edge of governmental fintech. It all began on the crypto front, as speculators bid up the prices of numerous cryptocurrencies. This infatuation has blossomed to almost-mania levels. Meanwhile, the allure of stablecoins, tokens, and permanent financial and property ledgers all residing on blockchain systems keeps feeding the imaginations of private investors and various public officials alike.
governing.com
OPINION | September 16, 2025 • Girard Miller
Adoption of the technology remains fragmented across states and localities. Getting the most out of it requires proactive steps.
State and local governments are experimenting with artificial intelligence but lack systematic approaches to scale these efforts effectively and integrate AI into government operations. Instead, efforts have been piecemeal and slow, leaving many practitioners struggling to keep up with the ever-evolving uses of AI for transforming governance and policy implementation.
While some state and local governments are leading in implementing the technology, AI adoption remains fragmented. Last year, some 150 state bills were considered relating to the government use of AI, governors in 10 states issued executive orders supporting the study of AI for use in government operations, and 10 legislatures tasked agencies with capturing comprehensive inventories.
Taking advantage of the opportunity presented by AI is critical as decision-makers face an increasing slate of challenging implementation problems and as technology quickly evolves and develops new capabilities. The use of AI is not without risks. Developing and adapting the necessary checks and guidance is critical but can be challenging for such dynamic technologies. Shifting from seeing AI as merely a technical capability to considering what AI technology should be asked to do can help state and local governments think more creatively and strategically. Here are some of the benefits governments are already exploring:
governing.com
OPINION | September 11, 2025 • Joie Acosta and Sara Hughes, RAND
Road pricing, toll financing of major infrastructure, and devolution of some functions should be part of the transportation bill.
As director of transportation policy for Reason Foundation, I’ve been writing this monthly column in Public Works Financing for more than 25 years. For readers who don’t know much about Reason, you can get some perspective by perusing our website. We are a nonprofit public policy organization with divisions focused on journalism and policy research. Reason is based on the belief in free minds and free markets, and makes the case for limited government, individual liberty, and the rule of law.
Transportation is one of many research areas we engage in. Among Reason’s transportation principles are the user-pays/user-benefits principle, market pricing, federalism (where each level of government is responsible for its transportation infrastructure and operations), and the idea that benefits should exceed costs, wherever possible. This leads to Reason supporting road pricing, toll financing of major infrastructure, public-private partnerships (P3s), and devolution of some functions from higher to lower levels of government.
In anticipation of reauthorization of the federal surface transportation program in 2026, our transportation team has developed a set of eight policy recommendations, which are posted on our website. Not all of the principles are relevant to the focus of this newsletter, so I will summarize three of the most notable for this audience here, and another one next month.
reason.org
by Robert Poole
Director of Transportation Policy
September 10, 2025
The municipal-bond market just reached $400 billion in debt sales for the year, running far ahead of the already elevated levels seen last year.
Debt sales by states and municipalities through this week have surged roughly 17% from the same period last year, according to data compiled by Bloomberg. Municipalities rushed to sell debt to avoid any changes to the muni bond market from the “One Big Beautiful Bill” budget package signed by President Donald Trump in July. Municipalities have also been looking for new funding as they confront rising costs from inflation and the expiration of pandemic-era federal aid.
Still, bankers are divided on whether debt issuance will keep up the blistering pace through the end of the year.
Bloomberg Markets
By Aashna Shah
September 12, 2025
Takeaways by Bloomberg AI
Bloomberg Markets
By Martin Z Braun
September 12, 2025
Institutional demand has been slow to return to the muni market in 2025, leaving performance at the long end under pressure. Yet signs are emerging that banks, insurance companies, and crossover buyers may be stepping back in as tax clarity improves and relative value looks more compelling.
In this episode of FICC Focus, Bloomberg Intelligence analyst Karen Altamirano is joined by her former co-host, Eric Kazatsky, managing director and client portfolio manager at MacKay Shields, to discuss his new role, and how institutional money could help support the yield curve into year-end. Masters of the Muniverse is part of BI’s FICC Focus podcast series. Listen to this episode on Apple Podcasts and Spotify.
Sep 09, 2025
Overview
– Miami-Dade County proposes using appreciating stablecoin $FUSD to tackle $400M debt via crypto-driven fiscal policy.
– $FUSD combines overcollateralization with algorithmic market-making, aiming to generate yield while maintaining $1 peg.
– Risks include ZANO volatility, untested algorithmic bots, and precedents like Fantom’s fUSD collapse, raising governance and regulatory concerns.
– Strategy hinges on tokenizing $1B in assets but lacks technical details, sparking debates over innovation versus speculative financial engineering.
ainvest.com
by Riley Serkin
Sunday, Sep 7, 2025 6:41 am ET
Takeaways by Bloomberg AI
Bloomberg Markets
By Elizabeth Rembert and Amanda Albright
September 15, 2025
Summary
– The 2025 municipal bond market faces fiscal stress amid surging tax-exempt issuance and a steepening yield curve, mirroring historical dislocations like the 2008 crisis.
– Policy uncertainty from U.S. trade volatility and potential tax reforms disproportionately impacts healthcare, education, and infrastructure sectors with exposed credit fundamentals.
– Investors balance long-dated bond opportunities (3.37%-5.81% yields) with active management, prioritizing strong liquidity buffers and diversified revenue streams to hedge policy-driven risks.
– Despite record-low 2025 defaults (26 year-to-date), credit divergence widens, requiring disciplined selection of high-quality bonds with 15+ year maturities and stable toll-backed infrastructure projects.
ainvest.com
by Marcus Lee
Tuesday, Sep 9, 2025 3:37 am ET
Overview
– U.S. labor market shifts in 2025 drive equity rotations as healthcare gains jobs while manufacturing declines, reflecting structural trends like automation and aging demographics.
– Fed rate cuts anticipate labor weakness, prompting bond strategies to favor extended duration in municipal bonds and intermediate Treasuries amid a steepening yield curve.
– Investors prioritize healthcare and education sectors for resilience against automation, while construction and manufacturing face underperformance due to labor shortages and skills gaps.
– Strategic allocations balance sector rotations with bond duration flexibility, emphasizing tax-exempt income and hedging against rate volatility through diversified asset classes.
ainvest.com
TrendPulse Finance
Saturday, Sep 6, 2025 8:31 pm ET
Summary
– Fed’s 2025 rate-cut path (3 cuts by year-end) boosts municipal bond prices, especially long-duration instruments as yields fall.
– Investors advised to extend duration in high-quality municipal bonds, prioritize tax-exempt income, and leverage historical outperformance trends.
– Risks include inflation from tariffs undermining rate cuts and tightening credit spreads, requiring disciplined focus on high-credit-quality bonds.
The Federal Reserve’s anticipated easing cycle in 2025 has positioned municipal bonds as a compelling asset class for investors seeking strategic entry points. With the central bank poised to implement a 25-basis-point rate cut in September 2025, followed by further reductions in October and December, the municipal bond market is already pricing in a shift toward accommodative monetary policy. This environment, driven by a deteriorating labor market and inflationary pressures from tariffs, creates opportunities for investors to capitalize on yield advantages and duration positioning.
ainvest.com
by Victor Hale
Saturday, Sep 6, 2025 6:53 pm ET
Overview
– 2025 municipal bond strategies shift as states cut pandemic aid reliance, boost pension/infrastructure spending, and issue $281B in new debt to offset tax cut impacts.
– Steepened yield curves (127bps over 10Y Treasuries) enable “rolling down the curve” tactics, while tax-exempt municipals outperform Treasuries amid $9.2T Treasury refinancing risks.
– $10B YTD inflows reflect investor preference for duration extension and active management, with taxable municipals matching corporate yields and offering geopolitical risk resilience.
– Strategic “barbell” approaches combining short/long-term bonds and sector-specific opportunities in healthcare/transportation highlight market inefficiencies and yield capture potential.
ainvest.com
by Nathaniel Stone
Monday, Sep 8, 2025 10:44 pm ET
There’s a clear winner for most people, according to research
Many investors turn to tax-exempt municipal bonds to avoid paying federal and possibly local taxes, sacrificing a bit of yield in the hopes of having a higher after-tax return.
But is this better than investing in taxable bonds and paying taxes on income distributions and capital gains?
Exploring all muni funds in the U.S. over the past 15 years and comparing them with their comparable taxable-bond funds, we find that most investors are better off going with munis. Only in cases where an investor has a low marginal tax rate—below 30%—and is interested in short-term debt does it make sense to invest in taxable funds.
The Wall Street Journal
By Derek Horstmeyer
Sept. 3, 2025 9:00 am ET
For cities, towns and villages across the country, a strong credit rating isn’t just a sign of financial health, it’s an important tool for maintaining long term stability, attracting investors and lowering the cost of borrowing (PDF). Local leaders might wonder what separates municipalities with top ratings, often referred to as ‘AAA,’ from those still working toward an upgrade. The criteria used to assess municipal credit worthiness can sometimes feel nuanced. Municipalities may not realize how much weight is placed on their own governance practices, risk management and planning for the future.
Speaking with Daniel Golliday, Associate Director, Local Governments – West at S&P Global Ratings, he explained “issuers with the strongest credit profiles have a lot in common when it comes to management practices and policies. When policies and practices are developed as part of a comprehensive risk management and mitigation plan, they generally enhance a government’s ability to manage through economic cycles and contribute to credit stability.”
Frameworks for Evaluating Local Governments
According to Golliday, S&P uses a specific set of criteria depending on the type of debt being analyzed, which can include general obligation bonds, utility debt, rental housing bonds, tax increment financing and more. Other key agencies, Moody’s Ratings and Fitch Ratings, have similar methodologies they utilize for these purposes. This is with the goal of maintaining consistent application and comparison across ratings in the U.S. and over time. As Golliday noted, “we strive for each rating symbol to represent the same level of credit worthiness for issuers and issues in different sectors at different times.”
S&P local government methodology is centered around a scored framework established for U.S. governments, which has five equally weighted credit factors: economy, financial performance, reserves, liquidity management and debt and liabilities. These factors form what S&P refers to as the individual credit profile.
In addition to these five factors, S&P also analyzes an institutional framework based on the state where the local government resides. This framework, which can be found in table 3-5 of S&P Global Ratings publication Methodology for Rating U.S. Governments, reviews the formal rules, laws, practices and customs of the region focusing on three subfactors: predictability, revenue/expenditure balance and system support and transparency and accountability. Each subfactor includes a criteria table which gives an assessment of 1 to 6 according to where the locality aligns with the standards listed. This could mean that the highest possible rating for a city in one state might be limited compared to a similar city in another state due to strengths or relative weaknesses in their institutional framework.
Key Practices of Top-Rated Municipalities
From Golliday’s experience and observations at S&P Global Ratings, the cities that consistently earn and maintain a higher credit rating showcase a set of shared characteristics. While financial performance is an important factor, qualitative factors like a city’s management and governance also impact their credit assessment.
Municipalities working towards a higher rating could focus on these practices that Golliday recognized as consistent among highly rated municipalities:
It might be tempting to assume a healthy fund or balanced budget would guarantee an upgrade for a city. However, Golliday expressed that S&P’s analysts take a more holistic view that includes a peer comparison. A municipality could look strong on paper but end up trailing behind its peers due to a lack of formal policies or if the city shows weaker practices in management. The ratings committee will also look at how an issuer compares with regional and national peers, which means that even good finances can be seen as weaker when in a side-by-side review.
Factors that could limit considerations of a rating upgrade can include:
Additionally, Golliday noted that a limited economic base that is concentrated in one industry, broader macroeconomic conditions, inflation and monetary policy, can impact a local government’s credit rating even as they take proactive measures to improve.
Forward Progress
For local leaders hoping to upgrade their credit ratings, the key next steps could include prioritizing governance practices that align with good financial management, plan for the long term, and be proactive. Ratings reflect more than the fiscal condition of your city today: they show what a city has capacity for in the future.
National League of Cities
by Samantha Pedrosa
August 26, 2025
Fitch Ratings – San Francisco – 27 Aug 2025: Fitch Ratings has affirmed at ‘AA+’ the ratings of certain categories of debt directly tied to the creditworthiness of the United States or its related entities, following the affirmation of the United States of America’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘AA+’/’F1+’ with Stable Rating Outlooks.
Affected debt categories include:
–Pre-refunded bonds whose repayments are wholly dependent on ‘AA+’-rated United States government and agency obligations held in escrow;
–Municipal housing bonds that are primarily secured by mortgage-backed securities guaranteed by Ginnie Mae, Fannie Mae and/or Freddie Mac, whose ratings are currently linked to the U.S. sovereign rating.
Key Takeaways
03-Sep-2025 | 11:55 EDT
Local governments in the United States could save billions of dollars by using a blockchain-based system to issue bonds. SmartLedger Blockchain Solutions Inc. this week published a proposal for its “Strategic Blockchain Infrastructure Matrix” (SBIM) that would introduce massive cost savings and efficiency gains to the municipal bond market, freeing up valuable taxpayer funds for other vital projects like education, health, and public infrastructure.
There is currently $4 trillion worth of debt in the U.S. municipal bond market. However, a percentage of this money, vital for public use, is wasted on inefficiencies in the legacy systems used for issuing and administering the process. The results of this, SmartLedger says, are higher taxes, delayed infrastructure, and limited opportunities for everyday investors to become involved.
Using the SBIM instead would make the municipal bond market more transparent and efficient, compliant by design. It would also introduce more liquidity with narrower spreads and allow fractional ownership, which would mean even small investors could invest directly in their local communities. Blockchain inherently provides a secure and permanent record of transactions that are public and auditable.
coingeek.com
By Jon Southurst
1 September 2025
Summary
webforum.org
Sep 4, 2025
This week, GFOA announced that it is exploring the creation of a Public Finance Innovation Lab, a new initiative designed to accelerate how local governments adopt innovative practices and technologies.
To help lead this exploration, GFOA is launching a search for an Innovator-in-Residence, a visionary leader who will shape the Lab’s initial strategy, partnerships, and business model.
Growing judgments against cities are helping bust budgets.
One of the underlying narratives of this year’s Los Angeles wildfires is that just before the flames broke out, the city had cut fire department funding during a budget crunch. What drove that fiscal emergency? Hundreds of millions in unexpected legal payouts. This year alone, lawsuit liabilities will cost the city more than the wildfires themselves.
But Los Angeles isn’t alone. A wave of litigation—unleashed by bad legislation, unfavorable court rulings, and officials’ eagerness to settle—is driving liability costs sky-high in cities across the country. New York City paid out nearly $2 billion in claims last fiscal year, a one-year jump of almost $500 million. Chicago’s payouts are nearly double what the city budgeted for settlements and judgments. Because most cities are self-insured, it’s taxpayers who ultimately foot the bill.
Los Angeles illustrates how a mix of factors, including a state law that makes it easier to sue, has driven payouts to new heights. In 2018, California passed legislation allowing workers to file claims for harassment or a hostile work environment based on a single incident. Backed by a powerful group of plaintiffs’ attorneys, the law has triggered a surge of lawsuits against municipalities. Over the past five years, the LAPD alone has had to pay $68.5 million in settlements to its own employees. The city’s police chief has accused officers of turning the disciplinary system into a litigation lottery, where even a single reprimand can lead to a harassment claim and a payout.
city-journal.org
Summer 20225
Learn the types of public projects that states fund by issuing debt, how states take on debt and why journalists should cover state debt — plus, explore a state-by-state debt database.
When states take on debt, it’s usually for large infrastructure projects that may benefit multiple generations — for example, replacing bridges, building hospitals, or expanding highways and transit systems.
“Unlike the federal government, states generally limit the use of debt to support capital projects, not operating expenditures,” says Kathryn Vesey White, director of budget process studies at the National Association of State Budget Officers and co-author of a recent paper on federal and state fiscal processes.
News reporters are often assigned to cover big capital projects, and that includes understanding the debt that funds those projects. While interest rates on state debt are low overall, if those rates rose that could lead to tough choices for state leaders, including potentially scaling back or scraping capital investments.
journalistsresource.org
by Clark Merrefield | September 4, 2025
At least 20 of the nation’s 25 largest cities face budget gaps in 2026. As cities lean on reserves and costs outpace revenues, experts warn state flexibility will be critical.
Fiscal stress in the U.S.’ largest cities is widespread. In a five-month span from December 2024 to April 2025, Chicago, Los Angeles, San Francisco, and Washington all experienced credit rating downgrades. And while these cities have grabbed most of the headlines for the unique setbacks they have faced—wildfires in Los Angeles and federal cuts in Washington, for example—a diverse mix of cities that includes Dallas; Denver; Houston; and Jacksonville, Florida, also face daunting budget challenges.
Since January, at least 20 of the nation’s 25 most populous cities have reported budget gaps for fiscal year 2026—and often beyond—based on a review by The Pew Charitable Trusts of news reports, budget documents, and communications with city officials.
To better understand the causes of these challenges, their severity, and their likelihood of lingering, Pew researchers interviewed national experts, fiscal watchdogs, and city officials. Although the COVID-19 pandemic triggered a serious economic and demographic shock to big cities, the interviews suggest that the budget problems cannot be attributed to an abrupt reversal of fortunes in 2020.
governing.com
Sept. 4, 2025 • Josh Goodman, Pew Charitable Trusts
Government finance leaders today face a new budgeting imperative: moving from economic recovery to resilience. As trillions of dollars are spent on economic growth, the public expects transparency from their leaders and wants to see the measurable impact of funds spent.
To make every budgeted dollar count towards economic growth, finance leaders should shift towards informed budgeting. Informed budgeting uses performance metrics, citizen needs, and economic forecasts to allocate resources more effectively. Here’s how this approach can benefit public finance agencies and economies:
Microsoft
By Adam Carter, Senior Product Marketing Manager
Sept 3, 2025
A set of beta AI features has been introduced to help city finance teams cut down on manual tasks and improve the way municipal budgets are presented to the public.
The tools, developed by ClearGov, focus on reducing repetitive work, supporting compliance with recognised standards, and making complex financial information easier for citizens to understand.
Speaking to Cities Today, Chris Bullock, CEO of ClearGov, said the developments build on existing digital budgeting platforms that already save local governments “hundreds of hours compared to traditional methods”.
“With just a few clicks, they can build a budget book complete with best-practice content and any chart or graph they need,” he added. “New features like Narrative Generation and Document Import extend these time savings even further–automatically drafting narratives and making it easy to add external content. By offloading these tedious tasks to AI, Finance Directors can spend less time on manual work and more time focusing on strategic priorities.”
Narrative Generation is designed to produce draft explanations to accompany charts and graphs. The aim is to give readers clearer context on financial trends while allowing finance teams to refine and expand on the text.
“Narratives are paired with graphs to provide readers with context around the data and trends they’re viewing,” Bullock said. “These narratives are essential for translating financial data into something the average citizen can understand–without them, meaningful public engagement is difficult to achieve.”
Another feature, Document Import, enables externally created PDFs to be uploaded and automatically converted into a digital format, extracting and embedding tables, text and images into financial reports.
The free Budget Book Evaluator, also in beta, is intended to help municipalities benchmark their reports against US Government Finance Officers Association (GFOA) standards. Bullock explained: “The tool provides municipalities with feedback directly aligned to GFOA best practices, helping them identify gaps and opportunities for improvement before submitting for award consideration.”
Bullock confirmed that further AI features are in development but declined to provide details.
“Our focus is clear: delivering solutions that make municipalities more productive and help them build trust and support,” he said. “AI will play an integral role in how we continue to accomplish this in new and increasingly impactful ways.”
cities-today.com
by Jonathan Andrews
06 September 2025
Summary
Whether from the perspective of a developer, user or tenant, debt or equity financing provider, the government, or the broader community, the development of a data center project requires a host of considerations to assess its viability and position the project to become an operational and financial success that complements and enhances the surrounding community.
The Upshot
The attorneys of Ballard Spahr’s Data Centers team examine and explain these seven important areas of consideration for data center development projects:
The Bottom Line
A careful analysis of each of these considerations is critical when first evaluating a data center project and throughout its development lifecycle, particularly to manage key timing, regulatory, financing, infrastructure, and counter-party risks. Ballard Spahr’s Data Centers team brings together the range of legal and business experience across land use, complex real estate, construction and development, finance, energy, and government affairs and public policy necessary to guide stakeholders through every stage of a data center’s lifecycle.
by Bruce F. Johnson, Alicia B. Clark, Dominic J. De Simone, John P. Smolen, Matthew N. McClure, and Stacey C. Tyler
August 25, 2025
Ballard Spahr LLP
ften the beginning of a large infrastructure project can be daunting. Local governments regularly know they need to advance a financing plan for the project, but there are preparatory steps that need to be taken to even understand if a project is a candidate for innovative financing like a public-private partnership or if it is a candidate for low-cost federal loans rather than grants. Local governments may want to hire a financing expert or technical advisor to assess the project and offer the local government more informed options. This is where the Innovative Finance and Asset Concession Grant Program (IFAC) at the U.S. Department of Transportation (USDOT) Build America Bureau may be able to help.
Topline Summary
National League of Cities
By: Kyle Funk & Brittney D. Kohler
August 29, 2025
Community Development Financial Institutions (CDFIs) are mission-driven establishments with the main goal to support underserved communities in economic development and financial opportunity. This consists of financial assistance to both individuals and businesses through community banks, credit unions, loan funds and venture capital funds.
The Riegle Community Development and Regulatory Improvement Act of 1994 established the CDFI Fund and official CDFI Certification through the Department of Treasury. Certified CDFIs are recognized for their prioritization of promoting community development, specifically providing “financial services in low-income communities and to people who lack access to financing.” Certified CDFIs are eligible to apply for programs and awards through the CDFI Fund.
While regulated on the federal level, these institutions bridge the gap between public and private even at the local level.
National League of Cities
By: Safaya Fawzi
September 2, 2025
Economic development departments are often celebrated as promoters of prosperity and local employment. Each year, local governments spend tens of billions of dollars on economic development incentives—tax abatements, fee waivers, and direct subsidies—intended to lure private investment. Cities across the nation tout their ability to entice marquee employers, generate buzz with ribbon-cuttings, and implement incentive programs designed to attract private capital. Even small-city councils establish these departments to signal support for economic growth and to boost city revenues.
Yet beneath the surface of city branding, press releases, and fiscal sustainability strategies lies a more troubling reality: economic development departments, far from facilitating genuine development and demonstrating the appropriateness of their spending, entrench inefficiency, distort markets,1 and perpetuate the very obstacles they purport to overcome.
Incentives, Barriers, and the Illusion of Progress
Development incentives—tax rebates, fee waivers, and similar carrots—are meant to attract business investment. However, these incentives negate the tax and fee structures that cities themselves have painstakingly devised, often at great expense and through a protracted political process. For example, cities pay development and impact fee consultants tens of thousands of dollars to analyze and implement fee structures—purportedly based on the true cost of municipal services.2
California Policy Center
by Mark Moses
Senior Fellow
September 4, 2025
Summary
– Municipal bond markets face systemic risks from governance failures and fiscal mismanagement, highlighted by Puerto Rico’s PREPA and higher education defaults.
– Distressed credits like TSFC bonds (Cusip 88880NAU3) show declining revenues and structural weaknesses, trading at steep discounts despite no full default.
– Rising municipal yields (30-year bonds >5.5%) reflect increased default risks, while policy shifts and volatility demand active hedging via CDS, futures, and duration management.
– Investors must prioritize credit discipline, sector diversification, and liquidity analysis to balance income potential with capital preservation in a destabilized market.
ainvest.com
by Theodore Quinn
Wednesday, Aug 27, 2025 2:17 pm ET
Takeaways by Bloomberg AI
Bloomberg Markets
By Elizabeth Rembert
September 8, 2025
Takeaways by Bloomberg AI
Bloomberg Markets
By Danielle Moran and Aashna Shah
September 5, 2025
Thanks to higher yields and rising uncertainty in the equity markets, investors have once again started to consider bonds for their portfolios. Leading the way has been the municipal bond market. Interest in new fund launches and fund flows into muni ETFs has surged over the last year as investors look to realize lower taxes and high-income potential. But not all muni ETFs are the same. And investors may be leaving some returns on the table if they choose a passive ETF for their muni exposure.
Active is the way to go.
That’s according to a new report by Goldman Sachs. It turns out that active ETFs are the best vehicle for muni bond exposure. Thanks to several benefits inherent to active management, investors can achieve better outcomes in an active muni ETF than by simply holding the index. For investors, the choice is clear: active ETFs for muni bonds.
dividend.com
by Aaron Levitt
Aug 28, 2025
Summary
– Municipal bonds offer 4.73% tax-exempt yield (6.1% effective return) via NMI ETF, outperforming Treasuries by 200 bps in 10–20-year durations.
– Declining Treasury bid-to-cover ratios (2.35–2.53) and flattening yield curves highlight structural fragility, pushing investors toward short-duration assets.
– Duration extension in munis leverages 50 bps steeper yield curves and inflation hedges, with lower equity correlation (0.35) amid Trump-era policy risks.
– Strategic blends of long-duration munis (3.96% yield-to-worst) and short-maturity ETFs like MEAR (3.30%) balance yield capture with risk mitigation.
ainvest.com
by Nathaniel Stone
Thursday, Sep 4, 2025 5:40 am ET
Takeaways by Bloomberg AI
Municipal bonds rallied after weaker-than-expected job growth raised expectations that the Federal Reserve will start lowering interest rates this month to support the economy.
Bloomberg Business
By Danielle Moran and Aashna Shah
September 5, 2025
Summary
– Political polarization and high crime rates in U.S. cities like Memphis and Detroit amplify municipal bond risks, with partisan narratives skewing public perception despite mixed crime data.
– Federal troop deployments and militarized policing strategies introduce fiscal uncertainties, while racial disparities in majority-Black cities like Detroit raise borrowing costs due to systemic inequities.
– Studies show political gridlock increases bond yields by 7.81 basis points per polarization unit, with governance instability and inconsistent policing further destabilizing markets in polarized urban centers.
– Investors must assess beyond crime statistics, prioritizing local leadership dynamics, policy coherence, and racial equity impacts to mitigate risks in politically fragmented high-crime municipalities.
ainvest.com
by Albert Fox
Friday, Sep 5, 2025 5:06 pm ET
Takeaways by Bloomberg AI
Bloomberg Markets
By Aashna Shah
September 2, 2025
Summary
– Ohio’s non-profit hospitals, including the Cleveland Clinic, issued high-rated bonds (Aa2/AA) in 2025, attracting investors with strong credit metrics and $14.5B in unrestricted revenue.
– Robust market demand for these bonds persists, driven by infrastructure spending plans and alignment with ESG goals, despite rising Medicaid risks and 2024 sector downgrades.
– Investors must weigh Medicaid revenue vulnerabilities, labor costs, and macroeconomic risks against yields and geographic diversification in Ohio’s healthcare ecosystem.
– The bonds offer a nuanced opportunity: high yield with investment-grade safety for discerning investors who assess individual issuers’ resilience to systemic pressures.
ainvest.com
by Eli Grant
Thursday, Aug 28, 2025 8:48 pm ET
The debt securities category will always be the first choice for risk-averse investors because this class of instruments provides a regular income at low levels of risk. Income from regular dividends helps to ease the pain caused by plunging stock prices.
When considering the safety of capital invested, municipal bond mutual funds are second only to those investing in government securities. In addition, interest income earned from these securities is exempt from federal taxes and, in many cases, from state taxes.
Zacks Equity Research
August 28, 2025
Overview
– AllianceBernstein’s AFB raised monthly dividends by 17.6% to $0.0466/share in August 2025, enhancing income for investors in a high-rate environment.
– The fund allocates 75% to investment-grade municipal bonds and 25% to high-yield municipals, balancing risk while leveraging tax-exempt yields across 37 states.
– AFB’s 4.73% forward yield outperforms corporate bonds after-tax for high-bracket investors, with active duration management and geographic diversification mitigating rate volatility.
– Strategic leverage (48.58% of assets) amplifies returns but increases sensitivity to rate cuts, requiring investors to weigh risk tolerance against potential capital appreciation.
– AFB’s disciplined approach to tax-advantaged income and active management positions it as a resilient option amid fiscal uncertainty and shifting monetary policy in 2025.
ainvest.com
by Marcus Lee
Tuesday, Aug 26, 2025 11:36 am ET
Muni and corporate bonds trading activity has been reaching record levels through the first half of 2025 at the Intercontinental Exchange (ICE). This certainly speaks to the attractiveness of both, which offer yield and strong fundamentals in the current market landscape.
According to data from ICE, corporate bonds hit a national volume of $120 billion, while muni bonds totaled $109 billion. The rise represented an increase of 20% and 35%, respectively, from the previous year.
“We’re pleased to see the strong activity in the first half of the year, which marks the fourth consecutive year of volume increases in our corporate and municipal bond markets,” said Peter Borstelmann, president of ICE Bonds. ICE has been expanding its trading platforms, while building out its institutional and wealth management network. That’s a potential window into the activity of institutional and accredited investors regarding muni and corporate bonds.
Fixed income investors looking to diversify their portfolios that mainly hold Treasuries may want to consider either munis, corporates, or both. Active funds have been garnering a lot of attention this year. Vanguard has a pair of ETFs worth looking at for those who want simple, core exposure to either munis or corporates in a cost-effective investment vehicle.
etfdb.com
by Ben Hernandez
Aug 26, 2025
Takeaways by Bloomberg AI
Continue reading.
Bloomberg Markets
By Aashna Shah
August 20, 2025
Key Takeaways
Overview
S&P Global Ratings believes the recently passed U.S. tax and spending bill, particularly provisions tied to Medicaid (the joint state- and federal-funded program for low-income individuals that is managed largely at the state level), will have more impact on the not-for-profit acute health care sector compared with for-profit health care services because a greater percentage of the issuers are exposed to a higher Medicaid revenue mix.
We view not-for-profit health care organizations that could be more exposed to changes from the recent bill to include safety-net providers, district hospitals, children’s hospitals, and smaller stand-alone providers. However, there could be pockets of exposure for other not-for-profit acute health care organizations, as well as specific for-profit health care service providers that incorporate a more diverse set of health care service organizations beyond acute-care hospitals.
19-Aug-2025 | 15:51 EDT
Takeaways by Bloomberg AI
Bloomberg Markets
By Elizabeth Rembert
August 22, 2025
Floods are frequent, unpredictable and expensive. Fremont, Calif., is one of the first cities to secure flood insurance designed using AI.
In Brief:
Sitting high and dry on a hill, the police complex in Fremont, Calif., was the one municipal facility with flood insurance. This was because the hill was technically in a flood plain and the building served as collateral for a bond.
Steven Schwarz, Fremont’s risk manager, found this frustrating. “I have to insure a building for flood that’s never going to be flooded, whereas I’ve got other places in the city that potentially could be flooded,” he says.
When Schwarz brought this up in a conversation with his insurance broker, the broker introduced him to another option: A policy that could protect the city in the event of flooding anywhere in Fremont’s entire geographical area.
governing.com
by Carl Smith
August 22, 2025
State and local governments depend on federal data for everything from community planning to disaster response. What happens if it goes away?
In Brief:
State and local governments have long understood they’d have to adjust to shifting federal priorities under the Trump administration. But many did not recognize they might have to adapt to a world where it’s harder to access crucial data.
Recent changes in federal data collection and distribution will make it harder for state and local governments to plan for things like disease outbreaks, disasters, crime prevention, transportation and housing policy, says Brian Castrucci, the president and CEO of the de Beaumont Foundation, a public health nonprofit.
governing.com
by Carl Smith
August 21, 2025
The U.S. Environmental Protection Agency (EPA) has updated the federal requirements for the Water Infrastructure Finance and Innovation Act (WIFIA) Program through more than a dozen changes to the WIFIA Borrower Guide to Federal Requirements (Borrower Guide) and the WIFIA Specification Package and Bid Contract Language (Bid Contract Language). While some changes are minor, others will likely have major impacts on project owners and developers.
Guidance for Collaborative Delivery Projects
The EPA added a new section, “Collaborative Delivery Projects,” to the Borrower Guide, which focuses on WIFIA compliance for alternative delivery projects such as design-build, progressive design-build, construction manager at risk, and construction manager/general contractor. The new section makes clear that, for alternative delivery projects, it is the responsibility of the WIFIA borrower, not the project delivery firm, to ensure proper communication regarding compliance with WIFIA Program requirements to the entities developing the project and to define the roles and responsibilities between those entities for compliance documentation and reviews.
By Kyle Howe on 08.20.2025
Nossaman LLP
Overview
– Trump’s funding cuts to sanctuary cities blocked by courts, highlighting federal-state legal clashes over immigration enforcement.
– Judicial rulings like Orrick’s protect municipal grants, reducing credit risk but creating uncertainty for investors amid political divides.
– Historical precedents show mixed impacts on credit ratings, while investors favor resilient jurisdictions with diversified revenue and legal defenses.
– Investors advised to prioritize cities with strong fiscal discipline and legal resilience, avoiding high-risk areas facing direct funding threats.
ainvest.com
by Harrison Brooks
Friday, Aug 22, 2025 10:49 pm ET
Overview
– Trump-era policies reshaped municipal bond markets and local governance spending through deregulation, tax reforms, and funding cuts.
– The 2017 TCJA increased borrowing costs by $824B over a decade by eliminating tax exemptions for advance refunding bonds and threatening PABs.
– Medicaid and education funding cuts, plus climate risks, exposed fiscal vulnerabilities in states like Kansas and Washington, D.C., triggering credit downgrades.
– Deregulation and policy uncertainty heightened political risks, forcing investors to prioritize diversification and hedging against credit stress.
ainvest.com
by Cyrus Cole
Saturday, Aug 23, 2025 3:14 am ET
Overview
– Trump’s law-and-order policies risk municipal bond credit ratings via federal grant cuts to sanctuary cities like NYC and Chicago.
– Federal workforce reductions and immigration restrictions threaten urban real estate markets in D.C., LA, and Chicago through reduced demand.
– Proactive cities leveraging bonds for housing/education and adaptive reuse tax incentives may offer resilient investment opportunities.
– Investors must prioritize diversified portfolios, monitor legal challenges to sanctuary policies, and target resilient urban centers with strong governance.
ainvest.com
by Harrison Brooks
Friday, Aug 22, 2025 2:47 pm ET
Overview
– Trump’s federal interventions in local governance, including military deployments and sanctuary city policies, have heightened municipal credit risk and triggered legal challenges.
– Credit agencies like Moody’s and Fitch have downgraded or placed jurisdictions (e.g., D.C., Kansas) on negative outlook due to federal overreach disrupting budgeting and governance.
– The 2025 OBBBA Act preserved tax-exempt bond status but introduced Medicaid cuts and delayed disaster aid, exposing municipalities to fiscal shocks in high-risk regions.
– Investors now prioritize states with fiscal discipline (e.g., Oklahoma) while avoiding politically vulnerable jurisdictions, as credit risk increasingly depends on policy shifts over pure financial metrics.
ainvest.com
by Isaac Lane
Saturday, Aug 23, 2025 10:01 pm ET
The record-breaking pace of muni issuance and investors’ risk-off tone toward duration have been key drivers of the municipal yield curve’s sharp steepening, leading to its underperformance relative to other fixed income asset classes. In an environment also marked by market volatility and shifting policy dynamics, the case for active management in munis has never been stronger.
In this episode of Masters of the Muniverse, Bloomberg Intelligence analyst Karen Altamirano is joined by Jason Hannon, Head of Municipal Strategy and Senior Portfolio Manager at Wilmington Trust, to discuss how this year’s market developments are shaping muni investment decisions. This is part of BI’s FICC Focus podcast series.
Aug 19, 2025
In this Q&A, Mathew M. Kiselak, Vanguard’s head of active municipal portfolio management, shares his insights on the municipal bond market, opportunities for investors in the current environment, and why munis may be particularly suitable for rigorous active managers.
Munis were volatile earlier this year. What was driving that?
It’s been a bifurcated market between short and long munis. At the short end of the curve, yields have been falling because of expectations that the economy will slow by year-end and that the slowdown will lead to easing by the Federal Reserve. At the long end of the curve, yields have been rising because of uncertainty surrounding tariffs, inflation, and deficit spending, while supply has been increasing. The yield curve has sharply steepened, creating opportunities with longer munis.
Can you elaborate on why long munis are attractive now?
Munis have strong credit fundamentals—defaults are rare among munis with credit ratings of A and higher. And long munis are providing compelling after-tax returns. A yield of 4.80%, for example, is equivalent to 7.62% for someone in the 37% tax bracket—that’s on par with historical average equity returns of 7% to 9%, but with less risk.
Given the current combination of attractive risk characteristics and high after-tax yields—and the richer valuations of other asset classes like U.S. equities—high-quality, intermediate- to long-term munis may be something to consider. The breakeven tax bracket is lower than it generally has been in the past, even with current tax brackets that will be extended past 2025 under recent legislation.
Vanguard
by Mathew M. Kiselak
Vanguard Head of Active Municipal Portfolio Management
August 19, 2025
What if I told you we’ve got a shot at grabbing 2 cheap muni bonds that kick out huge dividends—I’m talking 7.5% and higher—and those payouts are tax-free too?
What I’m talking about might be the last bargain available to us in this (overheated) stock market. Stocks’ roll higher since the Liberation Day tariffs were put on hold has meant fewer income opportunities from S&P 500 names (as yields and share prices move in opposite directions).
That’s added even more appeal to the tax-free dividends (two, in particular) we’re going to talk about below. They deal in municipal bonds, which are issued by state and local governments to fund infrastructure projects. “Munis” also tend to offer healthy yields, typically 200 basis points above those on a 10-year Treasury note.
Forbes
By Michael Foster,Contributor. Michael writes on high income assets that help people retire early.
Aug 19, 2025, 07:12am EDT
Registers first spread-based click-to-trade corporate bond order
ATLANTA & NEW YORK–(BUSINESS WIRE)– Intercontinental Exchange (NYSE: ICE), a leading global provider of technology and data, today announced record trading volume in the first half of 2025 for corporate bond and municipal bond trading on the ICE Bonds’ electronic execution platforms.
Trading on ICE Bonds reached record notional volume of $120 billion for corporate bonds in the first half of 2025, up 20% from the first half of 2024. Municipal bond trading reached record notional volume of $109 billion in the first half of 2025, up 35% from the first half of 2024.
“We’re pleased to see the strong activity in the first half of the year, which marks the fourth consecutive year of volume increases in our corporate and municipal bond markets,” said Peter Borstelmann, President of ICE Bonds. “This growth is in line with the progress we’ve made over the last few years expanding the functionality on our platforms and building out our institutional and wealth management network of customers.”
ICE Bonds also recently recorded its first spread-based click-to-trade order, which blends the spread-based pricing protocol that institutional investors use with the click-to-trade execution protocol that is predominantly used by retail investors and wealth managers. This offers our market participants the risk management benefits of quotes priced at a spread to Treasuries, along with the ease of use and access that click-to-trade offers investors of all types. It also allows market participants to leverage the most efficient technology to access the growing volume of smaller-sized trades that we have seen become more prevalent in the fixed income market.
ICE Bonds offers deep liquidity pools that support multiple trading protocols including click-to-trade, sweeps, auctions and request for protocol (RFQ), with a vast breadth of fixed income data. ICE Bonds recently launched a new RFQ protocol for Mortgage-Backed Securities (MBS), which sits alongside ICE Bonds’ existing MBS Click-to-Trade marketplace and allows clients to send MBS RFQs within ICE TMC’s anonymous trading pool.
ICE’s evaluated pricing and analytics power those protocols, offering transparency and support across pre-trade, trade and post-trade workflows. Focused on execution efficiency, ICE Bonds enables both anonymous and disclosed counterparty interactions, and trading from odd-lots to blocks for Corporates, Municipals, Agencies, Treasuries and Certificates of Deposit.
For more information about ICE Bonds, please visit https://www.ice.com/fixed-income-data-services/fixed-income/ice-bonds.
Aug 18, 2025
Overview
– FUMB offers ultra-short municipal bonds to balance yield and rate risk in a high-interest environment.
– Its 0.61-year duration and 77.6% holdings maturing within 1 year minimize principal erosion from rate hikes.
– Tax-exempt income and active management (0.35% fee) enhance appeal for high-tax-bracket investors.
– The fund’s diversified, short-duration strategy provides stability amid Fed policy uncertainty and yield curve shifts.
ainvest.com
by Rhys Northwood
Friday, Aug 22, 2025 4:53 am ET
Cuts in funding don’t change counties’ obligations to their residents. They will have to figure out how to raise new revenue, cut services or both. But success in navigating this new landscape won’t come from austerity alone.
For decades, the federal government played a familiar role in the intergovernmental fiscal landscape: a partner that stepped in during times of extraordinary need. During natural disasters, agencies like the Federal Emergency Management Agency provided rapid emergency assistance. During economic crises, major legislation — most recently the American Rescue Plan Act — delivered flexible funding to help local governments respond, recover and rebuild.
Today, we are entering a new phase of fiscal federalism, one in which local governments are not just shouldering more of the work but are increasingly responsible for funding and delivering programs originally designed as federal commitments. With its administrative actions and the passage of the One Big Beautiful Bill Act, the federal government is stepping back from its traditional support role. And in doing so, it is placing county governments in particular under intensifying fiscal pressure while leaving in place the legal and programmatic obligations to provide mandated services such as SNAP food benefits or ensuring that county hospitals offer medical care to all regardless of insurance status.
This shift in responsibility was the focus of intense discussion at the recent annual conference of the National Association of Counties (NACo). Across panels and roundtables, the sense was clear: This is not a momentary squeeze, but the beginning of a lasting change in how counties are expected to govern.
OPINION | August 15, 2025 • Jed Herrmann and Teryn Zmuda
governing.com
The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. Its primary objective is to extend key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), including individual and corporate tax cuts. Beyond tax policy, the bill significantly reshapes federal spending and regulatory frameworks. Cities will likely feel the impact most acutely in four key areas:
Brownstein Hyatt Farber Schreck LLP – Douglas J. Friednash, Bart Reising, Daniel Joseph, Greg Sileo and John S. LaLime
August 12 2025
In July 2025, S&P Global Ratings maintained 28 ratings without revising the outlooks, took six positive ratings actions, and took eight negative rating actions in the U.S. not-for-profit health care sector. In addition, we revised two outlooks favorably and revised two outlooks unfavorably without changing the ratings.
The month’s activity also comprised 14 new sales. Those reviews included:
The 18 rating changes and outlook revisions consisted of the following:
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07-Aug-2025 | 10:07 EDT
Key Median Takeaways
07-Aug-2025 | 09:51 EDT
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07-Aug-2025 | 10:40 EDT
Fitch Ratings-New York/Chicago-13 August 2025: U.S. higher education institutions are increasingly vulnerable from high turnover of key administrators and significant staff reductions at the Department of Education (DOE), Fitch Ratings says. These challenges are particularly acute amid rapidly evolving federal policy issues and long-term sector dynamics such as changes in demographics.
University leadership stability and effectiveness have a direct influence on a university’s operating stability and financial risk. Leadership gaps—especially among college presidents, chief financial officers, board members, and other senior executives—can amplify existing risks and lead to negative credit rating actions. Fitch has observed that frequent executive turnover and weak board engagement often create ongoing risks for strategic direction and financial planning, particularly hurting lower-rated universities’ credit profiles. In two of the four downgrades of private institutions thus far YTD, president and other leadership turnover within the prior two years were contributing factors.
According to the American Council on Education’s (ACE) 2023 survey, approximately 25% to 40% of public and private higher education institutions have seen their presidents retire or move on to new roles in the past three years. The average tenure for a college president is now only about 5.9 years. Executive search timelines often extend over 9-12 months, hindering fundraising efforts, delaying necessary reforms, creating uncertainty around institutional direction, and causing unease among employees and faculty. Leadership changes also trigger further turnover, resulting in gaps in oversight or financial stewardship.
Continuity issues extend beyond executive leadership. Turnover among admissions and financial aid staff, who are responsible for executing recruitment and retention strategies, can disrupt enrollment planning and impact student demand and institutional reputation. During operational stress, Fitch evaluates enrollment strategies with particular attention to demographic shifts. Mismanagement of financial aid can lead to enrollment volatility, further affecting prospective student demand and donor support. Administrative decisions on academic offerings and program relevance also affect the ability to attract and retain students in order to support sustainable student-generated revenue.
External pressures can compound internal challenges. The DOE’s workforce has shrunk by about 50% since March, which is likely to increase operational challenges by delaying funding, limiting resource availability, and slowing oversight and approvals. Further, a flurry of federal actions directed at higher education have often required rapid, clear analysis and responses across institutional departments. Turnover in key decision-making roles can delay or muddle these responses, increasing uncertainty and reputational risk.
Fitch’s credit analysis incorporates operational and revenue stability in a forward-looking framework. As such, an expectation for stable leadership and effective and consistent plan execution are key components in our ratings and outlooks. Leadership’s approach to liquidity management and reserve policies is critical during financial and operating stress. Turnover that erodes institutional controls or destabilizes an institution’s finances may impact ratings. Missteps in regulatory compliance can jeopardize funding and operational continuity, increasing operational and reputational risks that subsequently affect enrollment and future viability.
S&P Global Ratings’ U.S. public finance housing rating actions (including outlook revisions) for second-quarter 2025 consisted of 18 positive rating actions, three negative rating actions, and 61 affirmations.
Second-Quarter Rating Actions
We took positive rating actions on 14 rental housing bond (RHB) credits, which consisted of 10 upgrades and four outlook changes (see table 1). Eight of the upgrades were in the military housing subsector. Of the eight upgrades, four reflected improved and sustained financial performance due to completion of repairs from the damage of Hurricane Florence, while another four reflected improved net cash flow, with effective gross income increasing at a higher rate than operating expenses. The remaining two upgrades were in the age-restricted housing subsector, reflecting improved net cash flow as a result of additional properties being included in the obligated group, as well as higher occupancy rates and ongoing expense management, which ultimately resulted in stronger maximum annual debt service (MADS) coverage.
Two of the positive rating actions were outlook revisions to positive on the first and second lien of an RHB in the military housing subsector as result of increases in occupancy and the Basic Allowance for Housing (BAH) rates, leading to improved MADS coverage and the likelihood that coverage will continue trending positively, which, all else being equal, could lead to higher overall credit quality. The remaining two outlook revisions to positive from stable occurred in the military housing and mobile home subsectors. The military housing outlook revision was due to increases in net rent collections from higher occupancy and rising BAH rates, while the mobile home outlook revision was due to ongoing expenditure management.
13-Aug-2025 | 16:12 EDT
Key Takeaways
14-Aug-2025 | 15:17 EDT
(Editor’s Note: Previous versions of this study included project finance issues as well as infrastructure issues that we analyzed under our corporate methodology. We have now changed our approach to focus exclusively on infrastructure issuer credit ratings that use the corporate criteria. For this reason, previous years’ findings will not be consistent with this year’s.)
Key Takeaways
The default tally among infrastructure entities rated by S&P Global Ratings was five in 2024, the same as in 2023 (see table 1). The default rate remained stable at 0.54%.
While investment-grade (rated ‘BBB-‘ or higher) defaults remain rare, there was one (confidentially rated) investment-grade default in 2024, along with three speculative-grade (rated ‘BB+’ or lower) defaults and one default from an issuer with a withdrawn rating. Investment-grade defaults have averaged 0.2 per year since 1981, compared with 1.7 speculative-grade defaults per year. The investment-grade default rate was 0.2% in 2024, up from zero in 2023, while the speculative-grade default rate fell to 1.5% from 2.0%.
13-Aug-2025 | 17:17 EDT
$45.98 Million Now Available – Applications Due October 1, 2025
Today, the U.S. Department of Transportation’s Build America Bureau (Bureau) announced a Notice of Funding Opportunity (NOFO) for the Innovative Finance and Asset Concession Grant Program (IFAC) making up to $45.98 million available to help public entities scan their existing assets to unlock their value and explore innovative financing, alternative delivery, and public-private partnership opportunities. Grants up to $2 million are available, with the first million requiring no local match.
Two types of grants are available under the program: Technical Assistance Grants and Expert Services Grants. Applicants can apply for either type of grant but must choose one for this round of funding.
Applications must be submitted through grants.gov, and are due October 1, 2025, at 11:59 p.m. ET.
The Build America Bureau will hold a free informational webinar for interested applicants on August 27, 2025, at 2:00 p.m. ET. Register for the webinar. Participation is not required, but is strongly recommended for applicants to learn more about the program and its requirements. For accommodations, please contact InnovativeFinanceTA@dot.gov by August 20, 2025. The recording and a copy of the presentation slides will be posted to IFAC’s webpage following the event.
Please email InnovativeFinanceTA@dot.gov with any questions and subscribe for email updates.
The Build America Bureau advances investment in transportation infrastructure by lending Federal funds to qualified borrowers; clearing roadblocks for credit worthy projects; and encouraging best practices in project planning, financing, delivery, and operations. The Bureau draws on expertise across DOT to serve as a point of coordination for states, municipalities, private partners, and other project sponsors seeking federal financing and technical assistance.
If you are interested in exploring federal financing with the Build America Bureau, please contact us at BuildAmerica@dot.gov.
In June 2024, the Community Development Financial Institutions Fund (CDFI Fund) released the General Reapplication Submission Deadlines for the CDFI Certification Application for all Certified CDFIs. The second reapplication submission window, Window 2, closes on September 30, 2025. To avoid delays or loss of Certification, organizations must act now to prepare their submissions and resolve outstanding issues.
Cut-off for Service Requests and Help Desk Questions
The CDFI Fund has been receiving a heavy volume of inquiries from CDFI Certification Applicants. In order to ensure a timely response to questions from Window 2 Applicants before the September 30 deadline, the CDFI Fund is implementing a cut-off for CDFI Certification Application-related Service Requests and Help Desk questions. The CDFI Fund will answer questions from Window 2 Applicants about the CDFI Certification Application submitted before 11:59 p.m. ET on September 12, 2025. After that time, Application questions from Window 2 Applicants received via Help Desk calls, Help Desk e-mails, and Service Requests will not be answered.
Technical support for AMIS will still be available for Window 2 Applicants until 5:00 p.m. ET on September 30, 2025.
Friday, August 15, 2025
Grants will empower communities to generate additional value from existing assets and deliver infrastructure faster and at lower cost using private sector innovative solutions and financing
WASHINGTON, D.C. – The U.S. Department of Transportation’s (USDOT) Build America Bureau (Bureau) today released a Notice of Funding Opportunity (NOFO) for the Innovative Finance and Asset Concession Grant Program (IFAC), making $45.98 million available to assist public entities in facilitating and evaluating public-private partnerships and exploring innovative financing and alternative delivery opportunities for Transportation Infrastructure Finance and Innovation Act (TIFIA)-eligible projects. Grants are available for up to $2 million, with the first $1 million requiring no local match. This is the second NOFO for IFAC, with funds allocated from fiscal years 2024, 2025, and 2026 (if available). Applications are due no later than October 1, 2025.
Two types of grants are available under the program: technical assistance and expert services. Technical assistance grants enable recipients to build organizational capacity and identify a portfolio of underutilized assets by hiring qualified employees or procuring advisors. Expert services grants enable recipients to procure expert professionals in connection with the development of a specific asset or assets. Applicants must choose one of the grant types to apply for in this round of funding.
Eligible applicants include state, Tribal, or local governments; special purpose public authorities; or agencies chartered by a state, Tribal, or local government.
“This novel program is promoting efficient and effective use of publicly owned assets, by enabling communities to find answers to this basic question: do they have underutilized assets that can be leveraged to address their infrastructure needs?” said Bureau Executive Director Morteza Farajian, Ph.D. “The Bureau is constructing a bridge between our state, tribal, and local partners who have valuable underutilized assets and private partners who have expertise and financial capital to generate additional value from those assets to address community needs faster and at lower cost.”
The Bureau will host a free informational webinar about the IFAC NOFO and program on August 27, 2025, from 2:00 p.m. to 3:30 p.m. ET (register here). Accommodation requests must be submitted to InnovativeFinanceTA@dot.gov by August 20, 2025. While participation in the webinar is not mandatory to receive funding, the Bureau encourages potential applicants to learn about the application process and activities that can be funded before applying.
The Bureau will post a recording of the webinar and a copy of the presentation on the Innovative Finance and Asset Concession Grant Program website.
This program, along with the Rural and Tribal Assistance Pilot Program, Regional Infrastructure Accelerator Program, and other technical assistance resources at USDOT, helps ensure communities have tools to access federal funding and financing for delivering transformative infrastructure projects faster and at lower cost.
Friday, August 15, 2025
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The Build America Bureau accelerates investment in transportation infrastructure by lending Federal funds to qualified public and private borrowers; clearing roadblocks for creditworthy projects; providing technical assistance services and grants to build regional and local capacity and implement best practices and innovative solutions in project planning, funding, financing, delivery, and operations. The Bureau draws on expertise across USDOT to serve as the point of coordination for states, municipalities, private partners, and other project sponsors seeking Federal financing.
Takeaways by Bloomberg AI
The owner of a Texas facility that recycles metals extracted from oil-refinery waste filed for bankruptcy after the venture was marred by equipment failures and commodity price volatility.
Aleon Metals LLC, which is responsible for $294 million of municipal debt that financed the construction of the recycling plant and another under development, filed for Chapter 11 Sunday in US Bankruptcy Court for the Southern District of Texas.
Bloomberg Industries
By Martin Z Braun
August 18, 2025
Takeaways by Bloomberg AI
The struggles of Florida’s Brightline private railroad are rippling through the municipal-bond market, sending junk-rated transportation debt to its worst performance in a decade.
Taxable and tax-exempt bonds of the money-losing rail company, which runs from Miami to Orlando, shed $870 million in market value last month after it delayed an interest payment on about $1.2 billion of debt. Ridership and revenue in Florida are trailing projections, and S&P Global Ratings and Fitch Ratings have cut its senior municipal bonds deeper into junk.
Bloomberg Markets
By Elizabeth Rembert
August 13, 2025
The US municipal bond market experienced negative returns in Q2 2025 due to inflation and monetary actions by the Federal Open Market Committee and fiscal actions by the Trump administration. These broader themes impacted the market, with a focus on interest rates and economic uncertainty.
The US municipal bond market experienced negative returns in the second quarter of 2025, primarily driven by inflation and monetary actions by the Federal Open Market Committee (FOMC) and fiscal actions by the Trump administration. These broader themes significantly impacted the market, with a focus on interest rates and economic uncertainty.
Inflation, which has been a persistent issue, has led to higher interest rates, making municipal bonds less attractive to investors. The FOMC’s recent monetary policy actions, aimed at controlling inflation, have further exacerbated this trend. Additionally, the Trump administration’s fiscal policies, including the proposed takeover of the Washington, DC, police force, have contributed to economic uncertainty, further impacting the market [1].
Ainvest.com
Sunday, Aug 17, 2025
Takeaways by Bloomberg AI
A high-yield municipal-bond fund run by Capital Group saw the biggest inflow of any US-based exchange-traded fund on Friday, with an infusion of $1.54 billion.
The Capital Group Municipal High-Income ETF had $241 million of assets on Thursday. One day later, that had jumped to $1.78 billion, a 639% gain, after the massive influx of cash, the data shows.
Bloomberg Markets
By Elizabeth Rembert
August 18, 2025
Record First Half at ICE Bonds for Corporate and Municipal Bond Trading
Registers first spread-based click-to-trade corporate bond order
Intercontinental Exchange (NYSE: ICE), a leading global provider of technology and data, today announced record trading volume in the first half of 2025 for corporate bond and municipal bond trading on the ICE Bonds’ electronic execution platforms.
Trading on ICE Bonds reached record notional volume of $120 billion for corporate bonds in the first half of 2025, up 20% from the first half of 2024. Municipal bond trading reached record notional volume of $109 billion in the first half of 2025, up 35% from the first half of 2024.
“We’re pleased to see the strong activity in the first half of the year, which marks the fourth consecutive year of volume increases in our corporate and municipal bond markets,” said Peter Borstelmann, President of ICE Bonds. “This growth is in line with the progress we’ve made over the last few years expanding the functionality on our platforms and building out our institutional and wealth management network of customers.”
ICE Bonds also recently recorded its first spread-based click-to-trade order, which blends the spread-based pricing protocol that institutional investors use with the click-to-trade execution protocol that is predominantly used by retail investors and wealth managers. This offers our market participants the risk management benefits of quotes priced at a spread to Treasuries, along with the ease of use and access that click-to-trade offers investors of all types. It also allows market participants to leverage the most efficient technology to access the growing volume of smaller-sized trades that we have seen become more prevalent in the fixed income market.
ICE Bonds offers deep liquidity pools that support multiple trading protocols including click-to-trade, sweeps, auctions and request for protocol (RFQ), with a vast breadth of fixed income data. ICE Bonds recently launched a new RFQ protocol for Mortgage-Backed Securities (MBS), which sits alongside ICE Bonds’ existing MBS Click-to-Trade marketplace and allows clients to send MBS RFQs within ICE TMC’s anonymous trading pool.
ICE’s evaluated pricing and analytics power those protocols, offering transparency and support across pre-trade, trade and post-trade workflows. Focused on execution efficiency, ICE Bonds enables both anonymous and disclosed counterparty interactions, and trading from odd-lots to blocks for Corporates, Municipals, Agencies, Treasuries and Certificates of Deposit.
For more information about ICE Bonds, please visit https://www.ice.com/fixed-income-data-services/fixed-income/ice-bonds.
Provided by Business Wire Aug 18, 2025, 5:30:00 AM
Lauded for their yield, credit quality, and of course, their federal tax-free income, municipal bond benefits are also extending into the containment of tariff contagion. A pair of funds that income investors should consider are the Vanguard Tax-Exempt Bond ETF (VTEB) and the Vanguard Core Tax-Exempt Bond ETF (VCRM).
As Vanguard noted, because munis derive their income from sources such as state income or property taxes, they are more insulated from the effect of tariffs, which have remained front and center in the 24-hour financial news cycle. Compare this to corporate bonds where certain companies could be affected by tariff levies on their products or even safe haven Treasuries where the rising cost of imported goods could keep inflation elevated and thus, apply downward price pressure while yields remain high.
“Municipal bonds also offer potential tax benefits, along with a domestic focus that largely shields them from tariff-related risks,” noted Vanguard in its most recent ETF industry perspective, noting that the income derived from munis are “insulated from the cause-and-effect concerns surrounding tariff policies.”
etftrends.com
by Ben Hernandez
August 15, 2025
– Police accountability failures are reshaping municipal bond markets, driving credit downgrades and rising insurance liabilities as cities like Phoenix and Minneapolis face fiscal strain from reform costs.
– Racial disparities in credit ratings highlight systemic biases, with cities having larger Black populations often rated lower despite comparable economic performance, merging social justice with financial risk.
– Third-party litigation financing inflates settlement costs by 27%, pressuring insurers and municipalities as prolonged legal battles increase borrowing costs and regulatory scrutiny intensifies.
– Investors must balance high-yield litigation finance opportunities with governance risks, prioritizing cities with transparent reforms and diversified revenue to mitigate systemic instability.
ainvest.com
by Henry Rivers
Saturday, Aug 16, 2025 4:30 am ET
Municipal Bond Credit Quality Remains Strong, Even as the Boom Fades
Between 2021 and 2024, many U.S. public entities, particularly state and local governments, experienced an unprecedented era of abundance. Massive federal aid, unexpected revenue growth (in the face of mounting uncertainty), and a surprisingly resilient economy did not just stabilize many public sector budgets; they elevated them to historic highs.
advisorhub.com
by Tom Kozlik, HilltopSecurities
August 13, 2025
Aime Summary
– California’s municipal bonds (rated AA by major agencies) show strong credit fundamentals amid fiscal resilience and strategic infrastructure reforms.
– Governor Newsom’s Jobs First Blueprint targets 10 growth sectors with $532M in workforce training and regional equity programs to boost long-term economic competitiveness.
– 2025 CEQA reforms accelerate urban housing development by exempting infill projects from costly environmental reviews, creating new municipal financing opportunities.
– Investors are advised to prioritize short-duration, high-rated bonds (AA/Aa+) to mitigate risks from federal tariffs and potential budget cuts while benefiting from policy-driven growth tailwinds.
ainvest.com
by Julian West
Monday, Aug 11, 2025 10:56 pm ET
A high-yield municipal-bond fund run by Capital Group saw the biggest inflow of any US-based exchange-traded funds on Friday, with an infusion of $1.54 billion.
The Capital Group Municipal High-Income ETF had $241 million of assets on Thursday. One day later, that had jumped to $1.78 billion, a 639% gain, after the massive influx of cash, the data shows.
The influx was more than seven times the next largest gain among fixed-income ETFs — a $206 million inflow into a roughly $55 billion BlackRock Inc. offering that invests in short-term Treasuries, according to data compiled by Bloomberg. The entire US ETF universe totals about $12 trillion.
Bloomberg Markets
By Elizabeth Rembert
August 18, 2025
Newly released end-of-year revenue totals indicate states largely saw a third consecutive year of slow growth in tax collections in fiscal 2025. Despite modest gains in revenue collections, most states ended the year above both their original and revised revenue forecasts. Comparing actual collections to forecasts is a better indicator of state revenue performance than year-over-year growth figures which, in many states, have been considerably impacted by recently enacted tax cuts. While most states are reporting revenue surpluses, the surplus amounts are relatively small, especially when compared to the substantial surpluses experienced by states in fiscal 2021 and fiscal 2022. A number of states indicated their revenue totals were above forecast by less than one percent, with some also seeing revenues come in slightly below forecast.
As NASBO’s Spring 2025 Fiscal Survey of States highlighted, after the two fastest growing years on record for general fund revenue in fiscal 2021 and fiscal 2022, growth in revenue collections has been modest in each year since. In fiscal 2023 through estimated fiscal 2025, annual general fund revenue growth on a median basis has been between 1 and 2 percent. Preliminary year-over-year totals for fiscal 2025 were largely in-line with recent trends, with most states seeing slow growth in tax collections compared to fiscal 2024, and other states recording modest declines. When examining individual revenue sources, initial data shows that the growth in personal income taxes was slightly higher than the growth in sales tax collections, while most states reported declines in corporate tax collections. Factors impacting year-over-year growth levels included recently enacted tax cuts, strong stock market performance in calendar year 2024, low unemployment levels, slower growth in consumption, and lower inflation.
Similar to recent years, states are anticipating modest revenue gains in fiscal 2026. Recommended budgets for fiscal 2026 are based on general fund revenues increasing 2.4 percent on a median basis. In discussing their end-of-year fiscal 2025 revenue totals and outlooks for fiscal 2026, states noted heightened economic uncertainty, the potential impact of tariffs and federal policy changes, increased spending demands, and the overall resilience of the state economy.
National Association of State Budget Officers
By Brian Sigritz
Fitch Ratings-Chicago/Austin-07 August 2025: Standalone U.S. not-for-profit children’s hospitals demonstrated signs of financial recovery in fiscal 2024, with improved profitability and strengthened liquidity, according to Fitch Ratings’ latest annual median ratios report. However, persistent structural challenges — particularly heightened Medicaid funding risks — continue to weigh on the sector’s outlook.
After two years of declining profitability, children’s hospitals reported a rebound in operating margins and healthy capital investment. The median operating margin rose to 3.2% in 2024, while median days cash on hand increased to 356, underscoring strong sector liquidity and credit fundamentals. Despite these gains, operating margins remain below pre-pandemic levels and the sector faces continued cost pressures — especially from staffing.
“Children’s hospitals are adapting with operational innovations and technology adoption, but staffing costs remain high and pending changes to Medicaid funding will test the sector’s resilience,” said Director Richard Park.
The recently enacted U.S. tax and spending bill, which imposes new limits on state Medicaid payments and supplemental funding, poses a significant long-term risk to the financial flexibility of children’s hospitals, many of which serve patient populations with 70%-80% Medicaid reliance. Most Medicaid changes in the bill will not take effect until late 2026, with provider tax and directed payment rate adjustments phased in over several years, allowing some time for hospitals to adapt. However, if federal funding streams are reduced, hospitals may ultimately face difficult decisions regarding specialized service lines and uncompensated care.
Ongoing demographic shifts, including declining fertility rates, add to the long-term strategic challenges. Meanwhile, competition from general acute care hospitals expanding pediatric services continues to intensify.
“Children’s hospitals benefit from robust market positions, philanthropic support, and a commitment to capital investment — key credit differentiators that help offset ongoing policy and operating headwinds,” said Park.
Fitch’s “2025 Median Ratios for Not-for-Profit Children’s Hospitals” report is available at www.fitchratings.com
Contacts:
Richard Park
Director
+1-512-813-5704
richard.park@fitchratings.com
Fitch Ratings, Inc.
2600 Via Fortuna, Suite 330
Austin, TX 78746
Gregory Dziubinski
Associate Director
+1-312-606-2347
gregory.dziubinski@fitchratings.com
Kevin Holloran
Senior Director
+1-512-813-5700
kevin.holloran@fitchratings.com
Media Relations: Cristina Bermudez, New York, Tel: +1 212 612 7892, Email: cristina.bermudez@thefitchgroup.com
Takeaways by Bloomberg AI
Few in the US healthcare sector are immune to the effects of Washington’s recent cuts to Medicaid, even the cash-rich teaching hospitals affiliated with top-notch medical schools.
Bloomberg Industries
By Erin Hudson and Elizabeth Rembert
August 7, 2025
Related Content: Exposure Draft: U.S. Public Finance Charter School Rating Criteria
Fitch Ratings-Chicago/New York-04 August 2025: Fitch Ratings has published an exposure draft detailing proposed revisions to its rating criteria for U.S. Public Finance Charter Schools.
“The proposed revisions will better reflect the diverse risk profiles of charter schools as the sector has evolved to encompass stronger, established operators as well as weaker, possibly newer entrants,” said Senior Director Emily Wadhwani. The updated criteria will remodel the way Fitch addresses the sector’s unique risks, including those related to renewal and revocation of charters, which are typically shorter in length than a school’s bond maturities. The criteria will also explicitly incorporate evaluations of management and governance, and certain bond provisions, in Fitch’s analysis.
Highlights of the proposed charter school criteria include:
–Increased granularity within the three Key Rating Drivers (KRDs) that are inputs to final ratings, growing the possible number of KRD assessment outcomes to four from three. In addition, the new proposed nomenclature for the assessments of ‘a’, ‘bbb’, ‘bb’ and ‘b’ will more intuitively align KRD assessments to final ratings than the current ‘Stronger’, ‘Midrange’, and ‘Weaker’ assessments;
–Revision of the Revenue Defensibility KRD to include three distinct subfactors: enrollment and academics, revenue and funding, and policy framework. In addition, Fitch currently categorizes certain regulatory, political, and charter renewal considerations as “asymmetric” factors that can only negatively affect the KRD assessment. Under the updated criteria, they will be able to either positively or negatively affect the KRD assessment;
–Enhancement of the Operating Risk KRD to include key metrics that scale operating cash flow, carrying costs, and capital spending. A new management framework to be incorporated into the Operating Risk KRD will provide a more structured and transparent approach to assessing the management and governance factors most likely to contribute to the health of a charter school’s operations.
–Expansion of the Financial Profile KRD, incorporating three leverage-related metrics instead of one. The KRD will also explicitly consider debt structure risks and certain bond provisions that may promote solvency in stress situations such as financial covenants and debt service reserves; and
–The addition of weights to the components of each KRD to aid consistency and transparency.
“As the charter school sector has matured, the range of management and governance structures and credit risk profiles has widened,” Wadhwani added. “The proposed criteria enhancements will support more differentiation among ratings for Fitch-rated charter schools within a more modernized, relevant and transparent ratings framework.”
Fitch anticipates no rating impact to current ratings from the proposed criteria updates.
Fitch is actively soliciting market feedback on the proposed criteria. Send comments to criteria.feedback@fitchratings.com by Sept. 30, 2025. In addition to the exposure draft, Fitch has also published an Exposure Draft Frequently Asked Questions (FAQs) on the proposed U.S. Public Finance Charter School Rating Criteria.
Fitch’s “Exposure Draft: U.S. Public Finance Charter School Rating Criteria” and the FAQs are available at www.fitchratings.com or by clicking the link above.
Contact:
Emily E. Wadhwani
Senior Director
+1 312-368-3347
emily.wadhwani@fitchratings.com
Fitch Ratings, Inc.
One North Wacker Drive
Chicago, IL 60606
Akiko M. Mitsui, CFA
Director
+1 212 612 7822
akiko.mitsui@fitchratings.com
Fitch Ratings, Inc.
300 W. 57 Street
New York, NY 10019
Media Relations: Cristina Bermudez, New York, Tel: +1 212 612 7892, Email: cristina.bermudez@thefitchgroup.com
Additional information is available on www.fitchratings.com
11-Aug-2025 | 16:58 EDT
11-Aug-2025 | 16:04 EDT
11-Aug-2025 | 11:23 EDT
SIFMA Research tracks issuance, trading, and outstanding data for the U.S. municipal bond market. Issuance data is broken out by bond type, bid type, capital type, tax type, coupon type and callable status and includes average maturity. Trading volume data shows total and average daily volume and has customer bought/customer sold/dealer trade breakouts. Outstanding data includes holders’ statistics. Data is downloadable by monthly, quarterly and annual statistics including trend analysis.
YTD statistics include:
The 2025 sector outlook for Water & Sewer has been revised to ‘deteriorating,’ reflecting higher tariff rates and inflationary pressures. Approximately 89% of USPF ratings have Stable Outlooks, with 6% Positive and 5% Negative.
Mon 04 Aug, 2025 – 11:03 AM ET
On July 7, 2025, the Department of Transportation (DOT) announced a policy update raising the maximum percentage of loan financing for transportation infrastructure projects under the Transportation Infrastructure Finance and Innovation Act (TIFIA) program from 33% to 49% of eligible costs. TIFIA was created in 1998 to support the funding needs of transportation infrastructure projects. Although the legislation always allowed for financing of up to 49% of eligible costs, it was the DOT’s long-standing policy to cap loan amounts at 33% of costs for most types of projects. This policy update aligns the DOT’s practice with the maximum loan percentage authorized by law. Project sponsors seeking to build transportation infrastructure should use this new ceiling to their full financial advantage.
TIFIA provides long-term, low-interest loans and other credit assistance for the construction of surface transportation projects of national or regional significance. Often TIFIA loans are made on more advantageous terms than the traditional financial market, which enables projects to obtain financing that might not otherwise be available.
Congress enacted TIFIA to respond to concerns that traditional public funding techniques were unable to keep pace with the transportation infrastructure investment needs of the United States. Through TIFIA, the government fills financing gaps and fuels the growth of critical infrastructure projects by encouraging and complementing state, local and private investment. TIFIA loans have been deployed to support major surface transportation public-private partnerships across the United States, including the Downtown Tunnel/Midtown Tunnel/MLK Extension project in Virginia and the North Tarrant Express managed lanes network in Texas.
Insight | August 6, 2025
Summary
– Dallas Legacy Midtown Park uses layered municipal bonds to optimize capital efficiency and mitigate risk in senior housing infrastructure.
– Its $186.5M structure combines tax-exempt bonds, draw-down loans, and subordinate debt, saving $10.5M in interest while achieving 5.22% blended yield.
– The project aligns with aging demographics, addressing Dallas’s 35,000–40,000 unit senior housing gap with 95.6% occupancy in active adult communities.
– Investors gain 5.22% tax-exempt yield (vs. 4.1% Treasuries) and 7-year refinancing flexibility, leveraging demographic tailwinds and supply constraints.
ainvest.com
by Charles Hayes
Wednesday, Aug 6, 2025 2:33 pm ET
Summary
– Municipal bond markets face rising defaults in 2024, creating opportunities for firms with operational rigor and strategic foresight.
– Chung Ju-Yung’s philosophy of frugality, execution, and partnerships drives value creation in distressed infrastructure, exemplified by Clean Harbors’ success in repurposing industrial sites.
– Investors should target firms with proven distressed market expertise, strong balance sheets, and ESG-aligned partnerships to transform assets like toll roads or nursing homes into profitable ventures.
– Regulatory shifts and climate mandates will shape opportunities, with 72% of institutional investors prioritizing sustainability in distressed asset acquisitions.
– The next decade’s municipal bankruptcies offer a blueprint for reinvention, rewarding firms that turn decay into growth through strategic execution and community alignment.
ainvest.com
MarketPulse
Saturday, Aug 9, 2025 3:23 am ET
Relative to other developed countries, the construction of transportation infrastructure in the United States is extraordinarily time-consuming and expensive. A number of factors drive these costs, ranging from a lack of state capacity to excessive environmental, labor, and protectionist regulations to poor planning and a lack of accountability among state and local political leaders. Without effective reform, the cost of building roads, trains, and bridges in the United States will only continue to grow. But it has been impossible to enact reforms due to interest group opposition and skepticism about funding government expertise.
This paper proposes a framework—the “Priority List”— for how Congress can improve the efficiency of infrastructure construction in the United States. The Priority List would be a short list of nationally important and publicly popular infrastructure projects. The core of the idea is that Congress might be willing to pass needed reforms to get these very popular projects built, even if political roadblocks stand in the way of adopting reforms more broadly.
In constructing this list, the Secretary of Transportation would first identify a set of early-stage, high-profile infrastructure projects. Congress would then vote on the Secretary’s list as a “closed rule,” meaning that they vote up-or-down on the entire Priority List as opposed to voting on each project individually. The desire to get these high-profile projects built would be the sweetener needed to get Congress to swallow the political difficulty of passing reforms.
The Brookings Institution
by David Schleicher
August 7, 2025
The securities are now more attractive thanks to their availability and tax benefits. But how long will this last?
A steady increase in municipal-bond supply, coupled with the survival of their tax benefit in President Trump’s spending bill, is making the securities more attractive, even as key sectors such as healthcare and education stand to lose.
Municipal-bond investors are in a sweet spot. Prices have come down, due mainly to historically high issuance, and that pushes up the interest the securities pay. For most of this year, markets worried the One Big Beautiful Bill Act would curtail munis’ tax-exemption benefit, but intense lobbying managed to keep that from happening.
The combination represents an opportunity for investors to add some of the safest fixed-income securities to their portfolios while expecting unusually high, tax-free returns. What is unclear is how long this will last.
The Wall Street Journal
By Paulo Trevisani
Aug. 8, 2025 1:04 pm ET
Summary
– U.S. school district consolidations address enrollment declines and fiscal strain, with over 750 closures since 2020.
– Infrastructure upgrades in consolidated districts, like Michigan’s $75M investments, boost test scores by 8% and property values by 9%.
– Municipal/education ETFs (e.g., MYMJ) target school bonds, leveraging infrastructure-linked returns while addressing equity gaps in underserved districts.
– Strategic investments in HVAC, STEM, and safety yield dual benefits: academic improvements for low-income students and long-term community economic growth.
– ETFs combining high-grade bonds and geographic diversification offer investors tax-exempt income aligned with 5-10 year infrastructure project timelines.
ainvest.com
MarketPulse
Saturday, Aug 9, 2025 7:08 pm ET
Vanguard research assesses the investment opportunity in high-grade municipal bonds and the need to avoid overlapping with large-cap holdings when allocating to small- and mid-cap (SMID-cap) ETFs in portfolios.
Vanguard ETF Industry Perspectives Q3 2025 [4-page PDF] is our in-depth quarterly commentary featuring the latest ETF trends and insights. In each report, our investment experts help investors address issues that may affect their portfolios.
Key takeaways
Fixed income spotlight
Higher yields on municipal bonds have increased their appeal when optimizing overall fixed income allocations. Municipal bonds also offer potential tax benefits, along with a domestic focus that largely shields them from tariff-related risks. As the number of low-cost municipal bond funds has expanded, advisors and investors can now pick their spots with relative ease, targeting specific U.S. states, credit-quality levels, and parts of the yield curve.
Equity spotlight
S&P 500 ETFs continue to dominate fund flows, but allocations to SMID-cap ETFs also deserve careful attention. Our research shows that advisors seeking large-cap exposure tend to stick to market-cap ETFs like those linked to the S&P 500, Russell, or CRSP benchmarks. But when allocating to SMID-caps, advisors tend to vary their approaches between different market-cap indexes, niche small-cap products, and even active ETFs. This creates a risk of overlapping sector and company exposures because index products from different families are not all structured the same way. To limit this risk, we suggest that advisors choose products with compatible construction styles.
Vanguard
August 07, 2025
Summary
– Taxable local-government bonds outperformed 2025 muni market amid supply-driven dislocations and compressed tax-exempt spreads.
– Record $271B issuance and inflation-driven infrastructure costs fueled taxable bond demand with 4.74% yields vs. 3.30% for tax-exempt counterparts.
– Steepened yield curves and attractive tax-equivalent yields (up to 8.01%) positioned taxable bonds as strategic alternatives to corporate debt.
– Strong credit fundamentals in healthcare/education sectors and inverted credit spreads reinforced taxable bonds’ appeal for rate-sensitive investors.
– Fed rate cut expectations and short-duration advantages suggest continued outperformance as investors rotate from cash to munis.
ainvest.com
by Oliver Blake·
Aug 10, 2025
Summary
– Southern U.S. municipal bonds are gaining traction as climate-resilient infrastructure investments, driven by rising demand for flood mitigation projects.
– Texas’s TRIB bonds, backed by AAA ratings, fund coastal barriers and green spaces, offering tax-free returns while addressing climate risks.
– Investors benefit from high yields (10–15% above inflation) and ESG alignment, with federal grants covering 75–90% of project costs to reduce volatility.
– Risks include funding uncertainty and cost overruns, but diversified portfolios and performance metrics mitigate execution challenges.
– Strategic allocations to 5–30-year bonds and engineering firms like WSP offer pathways to capitalize on a $3 trillion climate adaptation opportunity.
ainvest.com
TrendPulse Finance
Tuesday, Aug 5, 2025 6:04 am ET