1/15/2024 0 Comments Municiple bond defaults![]() ![]() And the two types of bonds that are issued are general obligation bonds, bonds that are secured by taxes, and there are revenue bonds, bonds that are secured either by sewer revenue, water revenue, hospital bonds, bonds for stadiums that get revenue from stadium revenues, and the like.ĬAVANAUGH: And as you know, and as I said in my introduction, San Diego was frozen out of the bond market for several years. They pay for it over time just like we pay for a house. When the City of San Diego needs to borrow money for a major capital improvement, they go into the bond market to borrow money in large chunks. An easy comparison would be when you're buying a house, you get a mortgage on a house. Municipal bonds are bonds that are issued by cities, states, school districts to borrow money for large capital projects. What are municipal bonds? How are they used by governments? I wonder if you could give us a quick tutorial. So, Jeff, welcome to These Days.ĬAVANAUGH: Well, Jeff Horn, I introduced you as someone who had managed municipal bonds for 20 years. He's senior vice president for RBC Wealth Management in Los Angeles, and he was a municipal bond manager for 20 years. Bond Buyer's 19th Annual California Public Finance Conference is taking taking place in Carlsbad this week, and joining me for a quick tutorial on the municipal bond market and where it might be headed is my guest Jeff Horn. But just as San Diego's problems have eased, California's municipal bonds suffered a hit this year when a key rating agency gave the state the lowest credit rating of all fifty states. That market freeze-out ended for San Diego last year, and now the city is free once again to take part in the municipal bond market. Starting in 2004, the fallout from the city's underfunded pension crisis prevented the city from issuing debt in the form of bonds. ![]() The way many San Diegans were first introduced to the ins and outs of the municipal bond market was when San Diego was thrown out of it. MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. We'll speak to a former municipal bond trader about how the financial instruments are used, and to discuss what's happening with the bond market right now. How can local and regional governments overcome the massive debts they've been facing lately? Many are turning to the municipal bond market as a way to bring in additional revenue. ![]()
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