Municipal Finance

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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Creating a Live Yield Curve in the Illiquid Muni Market

Journal of Fixed Income (Summer 2017)

Optimal Municipal Bond Portfolios For Dynamic Tax Management

Journal Of Investment Management, Vol. 14, No. 1, (2016), pp. 81-99

Tax-Efficient Trading of Municipal Bonds

Financial Analysts Journal Volume 72 · Number 1 ©2016 CFA Institute

Making the Right Call
Credit (October 2010)
Explains contemporary refunding theory

What Makes the Municipal Yield Curve Rise?
The Journal of Fixed Income (Winter 2008)
Because the yields are of callable bonds

Subsidized Borrowing and The Discount Rate: The Case of Municipal Capital Budgeting and Financial Management
Municipal Finance Journal (Winter 1999)
Municipalities should value tax-exempt liabilities using their taxable rates

The Timing of Advance Refunding of Tax-Exempt Municipal Bonds
Municipal Finance Journal (Summer 1998)
Advance refunding should be decided by comparing the savings from refunding to the option value of the bond

Refunding Tax-Exempt Corporate Bonds in Advance of the Call
The Financier (February 1994)
A case study for an electric utility tender for which AKA served as advisor

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