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I discover myself pondering so much about threat as I ponder my new function as The Bond Purchaser’s first Market Intelligence analyst.
Danger is unavoidable in our on a regular basis lives. As we modify jobs or transfer into solely new careers, we tackle an unperceived quantity of threat — one thing I’m keenly conscious of as I transition right into a media function after 25-plus years in senior positions with Oppenheimer, MetLife, Neuberger Berman and different public finance corporations.
We are able to do our greatest to comprise the chance we face, to manage it, to react to it, to study from it, and to be extra conscious of it. However threat is at all times current. The identical is true, in fact, in public finance. We should take into consideration threat and the way this threat drives the funding thesis. I believe we have to begin by assessing the strategic implications of federal and state governmental, legislative, and judicial coverage shifts upon credit score and technical situations.
Evolving fiscal insurance policies on the federal degree have the potential to affect municipals from each a credit score and a technical perspective, with potential litigation rising from such developments. Though the broad menace to the tax-exemption
With the passage of H.R.1 (OBBBA), analysts might be figuring out the sector-specific implications of scheduled Medicaid cuts, modifications to increased schooling, changes to reasonably priced housing, and what a decreased federal function in regard to the Federal Emergency Administration Company would seem like ought to state and native governments tackle larger funding accountability.
Insurance policies surrounding tariffs and immigration may strain development and labor situations.
Successfully, the muni market stays carefully tethered to unsure political realities to the purpose the place financial coverage serves as a secondary backdrop. The Market Intelligence function will look carefully at sector distinctions with the intent to determine worth alternatives based mostly upon our analysis and expectations.
Danger within the municipal market may stem from the various market inefficiencies that will truly be a supply of alternative. Right here we take into consideration:
- the expansive dimension of the $4.3 trillion market with properly over 65,000 issuers;
- the variances in market pricing provided that we function a non-quoted over-the-counter market;
- fragmented provide amongst dealer/sellers;
- shifting economics/credit score high quality;
- advanced concern buildings together with sinking funds, extraordinary redemption provisions, make-whole calls, and counter-party publicity;
- improved, but nonetheless inconsistent information availability/disclosure; and
- ranking anomalies.
All of those areas are fertile floor for Market Intelligence commentary and actionable steering and, as an analyst, I’ve evaluated all of those concerns.
My new function provides me an opportunity to discover these sorts of points with you, leveraging my expertise conducting each sell-side and buy-side municipal credit score evaluation in addition to offering strategic market steering for traders. I am additionally relying on the sturdy relationships I’ve fashioned throughout the muni stakeholder neighborhood, enabling me to have interaction with key decisionmakers and to catalyze actionable concepts and insights.
Our Market Intelligence platform will permit The Bond Purchaser to supply a special market perspective backed by proprietary information and analysis, going past a complete evaluation of an issuer’s capability for well timed debt service fee. Though The Bond Purchaser won’t be advancing suggestions on particular person securities, we might at occasions spotlight a brand new credit score with uncommon safety features or one that provides distinctive market significance.
The creation of the Market Intelligence staff comes at a critically transformative intersection for The Bond Purchaser as this market mainstay ties collectively extremely acclaimed journalism with a deeper layer of subject material experience providing an insightful analytical and strategic voice.
In my capability because the Market Intelligence analyst, I might be partaking with the issuer and seller communities in addition to the authorized and buy-side contributors to assist sharpen their market intelligence pencils by figuring out related, well timed and impactful subjects, themes, and concepts which can be driving key resolution making.
It’s critically necessary to have such ongoing dialogue by means of direct outreach, one-one-one conferences, podcasts, thought management items, and participation at business occasions. It’s essential to supply steering and distinctive insights when navigating completely different and/or difficult markets by addressing the urgent problems with the day.
I look ahead to partaking with The Bond Purchaser neighborhood.
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