Muniland Minute: June 24, 2016

Illinois’ $12 Million Penalty, Against Minimum Denominations, Munis Buck Seasonal Slump

Muniland Minute: June 24, 2016
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Widening Spreads Cost Illinois $12 Million on Deal, New Report Says

“The political and financial dysfunction of Illinois cost the state $12 million on Thursday’s $550 million bond pricing compared to its previous sale in January, a new report said.”

Towards Maximum Denomination

The efficacy and real intention of minimum denomination has long been questioned, even when denomination was necessary to transact. Louis Brandeis argued against high denomination more than a century ago:

“Many cities are now prevented from selling bonds direct to the small investors, through laws which compel bonds to be issued in large denominations or which require the issue to be offered to the highest bidder. These legislative limitations should be promptly removed.”

Municipals Buck Seasonal Trend

“A major driver of June weakness in past years has been an increase in supply, with June averaging $38 billion in new issuance over the past 15 years—the heaviest month of the year. Supply did increase on cue in late May 2016, but proved to be little more than a speed bump in the face of global bond strength.”


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Rodrigo Davies

Chief Product Officer. Civic technologist and crowd expert. Runs on music.

RodrigoMuniland Minute: June 24, 2016

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