Bond Valuation and Structuring

Managing Duration Extension and Negative Convexity Near Par

The Bond Buyer - October 20, 2020

Negative Convexity

Tax-neutral analytics are key to accurately measuring interest rate sensitivity of munis near par.

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You haven't heard of ratchet bonds?

The Bond Buyer - June 8, 2020

Ratchet bonds are the best debt structure for issuers that you probably never heard of. TVA issued over $1 billion of these in the late 1990s and is still reaping the savings. Read more in Andy Kalotay's Bond Buyer commentary.

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There is hidden value for investors in callable taxables

The Bond Buyer - March 4, 2020

Commentary by Andy Kalotay in The Bond Buyer uncovers the hidden value in callable taxable munis. The calls are triggered by tax-exempt rates, while the bonds' worth depends on taxable rates.

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Life Without Advance Refunding

Municipal Finance Journal, Vol Volume 39 Number 03, Fall 2018

The elimination of advance refunding following the signing of the Tax Cuts and Jobs Act in December 2017 will have significant effects on the municipal market. In recent years, most municipal bonds aimed at institutional investors carried an above-market 5% coupon and had a 10-year call. The 5% NC-10 structure had wide appeal for a variety of reasons, a primary one being the bonds' eligibility for advance refunding. In the absence of advance refunding, the 5% NC-10 structure will lose much of its appeal.

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