Perspectives Blog

The coming divide in state credit quality

Ty Schoback, Senior Municipal Analyst | June 3, 2014

We expect an increased divergence in state credit quality in the coming years, compared with what has been seen over the past two decades. While the overall state sector remains robust, we believe notable credit distinctions are beginning to materialize among several weaker states. Investors should be aware of this divergence and seek to be appropriately compensated for investing in states of varied creditworthiness. State tax revenues typical…

Detroit bankruptcy — One year later

Ty Schoback, Senior Municipal Analyst | August 18, 2014

Ability is not the same as willingness to pay. Political pressures continue to influence the bankruptcy process, potentially to the detriment of bondholders and leaving politically-connected stakeholders more equal than others. Legal protections included in bond indentures may prove inadequate. The Unlimited-Tax G.O. (UTGO) bonds and the Limited-Tax G.O. (LTGO) bonds failed to deliver their expected resiliency and settlements are expected to le…