CDFA Bond Finance Update - June 16, 2020

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Features

BDA to Join CDFA in Support of Industrial Development Bonds Legislation

The BDA is joining forces with the Council of Development Finance Agencies in support of the Modernizing Agricultural and Manufacturing Bonds Act (MAMBA). The bill, sponsored by Reps. Stephanie Murphy (D-FL) and Darin LaHood (R-IL), would modernize the Internal Revenue Code as it relates to small issue bonds, specifically the private activity bond rules for first-time farmers and manufacturing bonds.

New York Fed Announces Start of Additional Secondary Market Corporate Credit Facility Purchases on June 16

The Federal Reserve Bank of New York today announced that the Secondary Market Corporate Credit Facility (SMCCF) will begin buying corporate bonds on June 16. The New York Fed also released additional Frequently Asked Questions regarding the purchase strategy for these eligible assets.

ICMA's Sustainability Standards and Labels for Green Bond Market Participants Updated

This document from the International Capital Market Association provides an overview for green bond market participants to consider when they are assessing the relevance, strengths, and weaknesses of various sustainability standards or labels as a suitable reference for assessing green eligibility.

House Democrats Propose $494B Surface Transportation Bill

House Transportation and Infrastructure Committee Chairman Peter DeFazio released a five year, $494 billion surface infrastructure and rail proposal Wednesday that does not have bipartisan support. Public finance groups, however, expressed hope Wednesday that the bill's introduction paves the way for consideration of bond provisions.

How State Bond Banks Could Supercharge Fiscal Federalism

State bond banks, which consolidate local bond issues to garner better interest rates and lower issuance costs, could supercharge the Fed's municipal-market operations and kickstart local infrastructure projects whenever Congress opens its construction checkbook. But to function as hubs in the intergovernmental finance network, the bond banks would need to expand their charters.

5 Reasons Municipals Have Rarely Defaulted

Default rates by municipal bond issuers have been remarkably low over the years. It's an impressive track record, and it explains why defaults by municipal issuers Puerto Rico and Detroit have made front-page news when they happen-they're actually quite rare.

Austin, TX, and CapMetro Agree to $10B Project Connect Transit Plan

Capital Metro's board and the Austin City Council both gave unanimous approval to a $9.8 billion transit plan that would build three light rail lines throughout Austin. The plan, called Project Connect, likely will be put to voters this November in the form of a tax rate election. The Orange Line resembles what many critics of the 2014 rail bond election called for leading up to that bond proposition.

Michigan Strategic Fund Approves Initiatives to Help with Economic Recovery

The city of Detroit Downtown Development Authority is also supporting the project with a $2.2 million loan, reduction of the land acquisition price, approval of the local portion of the brownfield tax increment financing with an estimated value of $1.55 million, and anticipated approvals of Commercial Rehabilitation Act and Neighborhood Enterprise Zone tax abatements valued at more than $10 million.

Market Reports

Upcoming Events

CDFA-PFM Capital Markets Webinar Series: What Worries Your Municipal Advisor

CDFA - TEDC Webinar: Public-Private Financing for Infrastructure in Uncertain Times
June 17, 2020 - 10:30 AM -12:00 PM Central

This exclusive webinar will provide 90 minutes of in-depth discussion about navigating the use of public-private partnerships for infrastructure projects in Texas. Experts from throughout the state will share first-hand knowledge of their experience utilizing P3 financing for successful infrastructure projects, and they will also provide insight on how development finance agencies can engage with P3s during uncertain economic conditions.

CDFA Federal Financing Webinar Series: Recovery Resources from the USDA
Friday, June 19, 2020 - 1:00 - 3:00 PM Eastern

During this webinar, experts from multiple USDA offices will dive into how the department has tailored its many financing programs to assist with the recovery while noting what we can learn from the pandemic to better prepare rural America for tomorrow.

News from

The latest municipal finance headlines from The Bond Buyer.

Bipartisan Group of Lawmakers Urges Expansion of Fed Muni Program

A bipartisan group of lawmakers is urging the Federal Reserve and Treasury to further expand a municipal note purchase program to be open to more local governments. A group of 12 representatives signed a letter Monday asking for the Fed and Treasury to further expand the Fed's Municipal Liquidity Facility by lowering population thresholds so more local governments can have direct access to it.

Water Groups Propose New Fed Program, Return of Advance Refunding

Water sector advocacy groups say water agencies will face cash-flow challenges over the next few years due to the coronavirus and want for federal relief through advance refunding and federal lending programs.

Illinois Fed Deal Bodes Well for Future Transactions

The Federal Reserve's first short-term note deal with the state of Illinois is a good start to the federal program that could jump-start its use with more local governments. Tuesday afternoon, Illinois became the first issuer to use the Fed's $500 billion Municipal Liquidity Facility and as a large issuer, that could bode well for the program's short future.

CDFA is proud to partner with The Bond Buyer as our Official Media Sponsor. Read more about this partnership and all of its benefits here.

Bond Finance Headlines

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Highlights from the Online Resource Database

CDFA - PFM Capital Markets Webinar Series: Impact of COVID-19 on the Bond Markets
Bond Finance | Disaster Recovery & Relief | Resiliency | Webcasts

During the first installment of the CDFA-PFM Capital Markets Webinar Series, we focused on the market impacts of COVID-19 through the start of June and what can be expected going forward.

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The Council of Development Finance Agencies is a national association dedicated to the advancement of development finance concerns and interests. CDFA is comprised of the nation's leading and most knowledgeable members of the development finance community representing public, private, and non-profit entities alike. For more information visit CDFA.net or email info@cdfa.net

For more information about sponsoring one of CDFA's electronic newsletters, please contact CDFA or call 614-705-1300.

Council of Development Finance Agencies
100 E. Broad Street, Suite 1200
Columbus, OH 43215
(614) 705-1300
info@cdfa.net