Municipal Finance

Tax Optimization - Investment Selection and Tax Rate Arbitrage

The Journal of Portfolio Management 2018

Tax-exempt municipal bonds are usually held in taxable accounts. This article discusses how after-tax performance can be increased by tax-beneficial sales.

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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Yield shocks underestimate the interest rate risk of callable bonds

Bond Buyer

When thinking of interest rates in the taxable world, practitioners look at bellwether indicators such as the 10-year U.S. Treasury yield, and more broadly at the Treasury yield curve — a representation of the interest rates that investors demand across the maturity spectrum. The frequency of the U.S.

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Don't Let Your Tax-loss Harvest Become a Harvest of Regret

Bond Buyer January 30, 2018

Andy Kalotay's commentary in The Bond Buyer explains how NOT to harvest munis. Financial advisors lack the tools to calculate the benefit from selling, and they routinely recommend transactions that are actually wasteful. With rates set to move higher, many opportunities will present themselves; smart players will want to be prepared with the right tools.

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