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CDFA Bond Finance Update - December 15, 2020

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Bond Finance Update
December 15, 2020
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CDFA Bond Finance Update

Features

New York's MTA Maxed Out Its Fed Credit Line. So Now What?
It says a lot about the state of the Metropolitan Transportation Authority's finances that the agency rushed to max out its credit line with the central bank before the MLF was shut down. It borrowed $2.9 billion last week, which would have easily been one of 2020's largest municipal-bond deals if it had gone through the public market.

Fitch Downgrades NY City Debt After S&P Revises Outlook on COVID Uncertainty
Rating agency Fitch downgraded New York City debt to 'AA-' from 'AA' while maintaining its negative outlook, on concerns of a prolonged impact on the city's economic growth due to the coronavirus crisis and related containment measures.

Short-Term Uncertainties As COVID-19 Cases Spike
As regional lockdowns loom in light of a renewed spike in coronavirus cases, the near-term outlook may be a bit bumpy, says Gene Podkaminer, Head of Research at Franklin Templeton Investment Solutions. He explores the potential market implications of renewed lockdowns and comments on how vaccine availability might affect a future economic recovery.

California Bond Program Helps Cities Secure Middle-Income Housing Without Upfront Cost
A new program run by the California Statewide Communities Development Authority is designed to help cities meet their goals for housing middle-income residents, those earning between 80 percent and 120 percent of the area median income. The authority issues tax-exempt bonds to help cities pay for development projects that have some public benefit.

New U.S. Dollar Libor Deadline Doesn't Guarantee a Smooth Transition
Pushing the Libor transition deadline for the U.S. dollar market back 18 months would lessen the risk of disorderly outcomes at year-end 2021, but using this extra time productively is the key to a smooth transition. Regulators and legislators might need to facilitate an orderly transition for hard-to-fix legacy contracts and liquidity needs to develop in derivatives based on the Secured Overnight Financing Rate.

Inflation Fears Heat up in Bond Market as ‘Reflation Story' Gains Ground
A powerful concoction made up of stimulus hopes, vaccine progress, and a patient Federal Reserve is powering inflation expectations to their highest levels in months. Worries around renewed price pressures have spilled over into the bond market, sending long-term Treasury yields to multiweek highs, amid hopes that a Senate bipartisan coronavirus aid proposal on Tuesday and a COVID-19 vaccine will allow the economy to begin returning to normal in 2021.

California Community Housing Agency P3 Converts Market-Rate Apartments to Rent-Restricted Middle-Income Housing
The California Community Housing Agency and the Catalyst Housing Group are pleased to announce the $49 million acquisition of The Arbors, a 162-unit rental property in Livermore, CA. CalCHA and Catalyst will transition the currently market-rate property to a rent-restricted community serving middle-income households earning no more than 120% of Alameda County's median income.

Major Redevelopment Project Breaks Ground in Columbus, OH
When complete, The Peninsula will be a mixed-use neighborhood with up to 1,800 residential units, 2 million square feet of office space, and 400 hotel rooms developed over the next 10 to 15 years. Phase 1 of the project is supported by a $7.22 million New Community Authority & Tax Increment Financing-backed infrastructure bond for funding public roads and utilities, as well as capital lease structures.

Market Reports

Weekly Market Outlook
Moody's Analytics | Dec. 10 | Bond Finance | Market Reports

Update on the Federal Reserve's Lending Facilities - November 23, 2020
Nov. 23 | Access to Capital | Bond Finance | Disaster Recovery & Relief | Federal Reserve | U.S. Dept. of Treasury

Capital Markets Insights
Wye River Group | Nov. 17 | Bond Finance | Market Reports

Upcoming Events
CDFA-PFM Capital Markets Webinar Series: Mitigating Default Risk with Bond Guarantee Programs

Intro Bond Finance WebCourse
February 24-25, 2021 - Daily: 12:00 - 5:00 PM Eastern
The Intro Bond Finance WebCourse provides an in-depth look at governmental and qualified private activity bonds, with a focus on industrial development bonds (IDBs), 501(c)(3) non-profit bonds, exempt facility bonds, and other special bond programs authorized by the federal government.

News from The Bond Buyer

The latest municipal finance headlines from The Bond Buyer.

Muni Yields Fall for the First Time in December
Municipal yields fell one to two basis points Tuesday on triple-A benchmarks, the first time since the beginning of the month the market saw any movement in the secondary. The new-issue market saw strong reception and deals priced at yields some might not have imagined a year ago on certain less-than-perfect credits. Primary repricings showed deals bumped by two to five basis points.

Fed, Treasury Agree to Extend Four Lending Facilities to March 31, 2021
The Federal Reserve and the Treasury Department have agreed to extend the life of four emergency lending facilities to March 31. Treasury Secretary Steven Mnuchin sent a letter to Fed Chair Jerome Powell approving the extension of the Fed's Commercial Paper Funding Facility, Money Market Mutual Fund Liquidity Facility, the Primary Dealer Credit Facility, and the Paycheck Protection Program Liquidity Facility.

Republican in Waiting for Senate Finance Chair Has Been Attuned to Muni Issues
The public finance sector will find an attentive audience from a new chairman of the Senate Finance Committee next year if Republicans retain majority control of the upper chamber. Sen. Mike Crapo of Idaho, who is expected to become chairman under a Republican Senate, has been receptive to increasing the limit on bank qualified debt.

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

Illinois' Bond-Market Penalty Hits Lowest Since Pandemic Crash
Bloomberg | Dec. 14 | Bond Finance | Disaster Recovery & Relief | COVID-19

Denver, CO Saves Over $60M from Better Denver Bonds Refunding, Closes on the Elevate Denver Fourth Issuance
Patch | Dec. 14 | Bond Finance | Community Development | Economic Development

Fitch Rates Florida DOT Financing Corp's $160M Revs 'AA+'; Outlook Stable
Fitch Ratings | Dec. 14 | Bond Finance | Infrastructure Finance

Florence County, SC Council to Consider $120M Bond Ordinance
SC Now | Dec. 14 | Bond Finance

City Of Liberal, KS Approves General Obligation Bonds
KSCB News | Dec. 14 | Bond Finance | Community Development | Rural Development

FAME Approves Additional Financing as Saddleback Ski Resort Prepares to Reopen
MaineBiz | Dec. 14 | Bond Finance | Member News | Tax Credits

U.S. States' Path to Economic Recovery: Declining Fiscal Support, Slowing Employment Revival
Fitch Ratings | Dec. 10 | Bond Finance | Disaster Recovery & Relief | COVID-19

St. Clair Shores, MI Eyes $6.6M Bond to Improve Lakeside Parks
Macomb Daily | Dec. 9 | Bond Finance | Community Development | Tax Increment Finance (TIF)

Nevada Reallocates $200M in Bonds From High-Speed Rail to Affordable Housing
Las Vegas Review-Journal | Dec. 9 | Bond Finance | Housing Finance | Infrastructure Finance

Missouri DNR Refinances State Revolving Fund Bonds
KMMO | Dec. 7 | Bond Finance | Revolving Loan Funds (RLFs)

Burgum Budget a Good Outline for Session
The Bismarck Tribune | Dec. 5 | Bond Finance | Revolving Loan Funds (RLFs) | Water Finance

Financing Arranged for 135-Unit Development in Boston, MA
Affordable Housing Finance | Dec. 2 | Bond Finance | Housing Finance

Transition Bonds Aimed at Heavy Corporate Emitters Set to Roll Out in 2021
Post-Gazette | Dec. 1 | Bond Finance | Energy Finance | Green Finance | International | Resiliency

JEDA Financing Secured for Legion Collegiate Academy in Rock Hill
SC JEDA | Nov. 30 | Bond Finance | Education | Member News

Arkansas School Installs Solar Panels to Save Millions On Energy and Pay Teachers More
My Modern Met | Nov. 17 | Bond Finance | Education | Energy Finance


Highlights from the Online Resource Database

The Municipal Liquidity Facility: How It Works
Bond Finance | Disaster Recovery & Relief
The Municipal Liquidity Facility is a Federal Reserve program created in April as a new financing source for state and local governments. This MLF factsheet was produced by the Pew Charitable Trusts in October 2020.

IRS Revenue Procedure 2020-45: 2021 Housing Credit and Housing Bond Volume Caps
Bond Finance | Housing Finance | Tax Credits
IRS Revenue Procedure 2020-45 sets out the 2021 Low-Income Housing Tax Credit and Bond Volume Caps.


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

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