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CDFA Bond Finance Update - May 19, 2020

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Bond Finance Update
May 19, 2020
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CDFA Bond Finance Update


Development Finance Agencies Urge Congress to Include Bond Provisions in Stimulus
The Council of Development Finance Agencies, along with hundreds of development finance agencies from across the country, have asked Congress to include a bond finance title in the next stimulus act. This policy is an essential component of CDFA's COVID-19 Comprehensive Recovery Strategy. You can sign the letter by visiting the CDFA Outreach Center.

Fed's Municipal Liquidity Facility Open for Business
The Federal Reserve's short-term municipal note program is "open today" to states and local governments struggling with financial woes during the pandemic, though it was reiterated that the program is a last resort. During a GFOA roundtable Monday, Kent Hiteshew, who was recently hired by the Fed to help with municipal markets, said the Municipal Liquidity Facility is open.

Economic Downturn Threatens Cities' Plans to Sell Housing Bonds
In the short term, governments at all levels are facing acute shortfalls because they have extended the due dates for many types of taxes. On top of that, investors have pulled huge sums of money out of the municipal bond markets. Longer-term, a recession will mean lower revenues for city and state governments overall. All those factors may make it a tough time for cities to sell bonds, says Katie Kramer, Vice President at CDFA.

Muni Finances Are a Mess But a Once-Junk City Just Got Upgraded
East Providence, Rhode Island, had its credit rating raised last week by Moody's Investors Service to A1, its fifth-highest investment grade. The upgrade marked the continuing recovery of a city that was put under financial supervision by the state in 2011 after years of budget deficits and underfunded pensions.

IRS Aids State and Local Governments With Tax-Exempt Tender Bonds, Commercial Paper
Governmental bond issuers often seek to lessen the budgetary blow from spiking interest rates by purchasing their own tender bonds and commercial paper and holding them until the markets return to normal. Fortunately, the IRS has provided administrative relief to promote liquidity and stability in the tax-exempt tender bond and commercial paper markets in response to the COVID-19 pandemic.

Municipal Liquidity Facility Adds $500B, Expands Issuers and Duration
The Federal Reserve Board recently announced that the Municipal Liquidity Facility will purchase up to an additional $500 billion in short-term notes issued by eligible government entities, in efforts to help states and municipalities with cash flow stresses resulting from the COVID-19 pandemic. The Board also expanded the number of entities eligible to participate in the MLF and revised eligibility requirements for short-term notes.

IRS Issues Revenue Procedure, Notice Providing Guidance for PABs During COVID-19
In Revenue Procedure 2020-21, the IRS provides temporary guidance to allow hearings held by teleconference due to the COVID-19 pandemic to meet the statutory public approval requirement for PABs. Notice 2020-25 temporarily expands the circumstances and period for which a PAB is treated as "continuing in effect" without requiring the reissuance or retirement.

Transportation Outlooks Largely Negative as COVID-19 Saps Demand; Utilities Outlooks Remain Mostly Stable
Since the coronavirus crisis emerged in late January, Moody's has revised downward nine of its 18 industry outlooks globally. Most of its outlook changes are within the transportation sectors of airports, toll roads, and seaports where demand has dropped precipitously. All of Moody's regional sector outlooks for airports are negative. Its utilities outlooks are largely stable.

Market Reports

Capital Market Insights
Wye River Group | May. 18 | Bond Finance | Market Reports

Weekly Market Outlook
Moody's Analytics | May. 14 | Bond Finance | Market Reports

Upcoming Events
CDFA Federal Financing Webinar Series: Federal Recovery Resources from the EDA

CDFA Food Systems Finance Webinar Series: The Landscape of Food Systems Finance
Thursday, May 28, 2020 - 2:00 PM Eastern
For the second installment of the CDFA Food Systems Finance Webinar Series, we will present key initiatives and programs being used to finance local food systems, and how CDFA is continuing to prove the food system as an asset class.

CDFA-Bricker PACE Webinar Series: PACE Program Efficiency - Managing An Effective PACE Program
Tuesday, June 9, 2020 - 11:00 AM - 1:00 PM Eastern
In this webinar, PACE professionals explore best practices in establishing and managing a PACE program and about new efficiencies being developed to drive more effective delivery of PACE programs and projects.

CDFA // BNY Mellon Development Finance Webcast Series: Financing Rural Healthcare
Tuesday, June 16, 2020 - 1:00 PM Eastern
During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, we will discuss financing programs that support healthcare development and showcase successful projects that have increased access to healthcare for rural communities.

News from The Bond Buyer

The latest municipal finance headlines from The Bond Buyer.

Advance Refunding Could Be Inserted into a Bipartisan HEROES Act
Reinstatement of advance refundings could be a relatively low-cost addition to the $3 trillion House-passed HEROES Act as congressional Democrats negotiate changes with Senate Republicans and the Trump administration, according to a leading Republican on the House Municipal Finance Caucus.

Illinois May Borrow Using MLF After a Fed Policy Adjustment
Illinois may use the Federal Reserve's Municipal Liquidity Facility for its $1.2 billion sale of one-year certificates to help manage a fiscal 2020 budget hole caused by the COVID-19-driven economic shutdown.

New York State Will Sell Short-Term Paper to Patch Coronavirus Revenue Losses
Short-term borrowing is part of New York State's plans to navigate the fiscal minefield created by the coronavirus. The $177 billion fiscal 2021 budget Gov. Andrew Cuomo signed in April provided mechanisms that authorize up to $8 billion in short-term borrowing to offset revenue losses.

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

Columbus-Franklin County Finance Authority Announces Hire of Vice President Patty Huddle
Columbus-Franklin County Finance Authority | May. 13 | Bond Finance | Member News

Green Bond Issuance Dips Amid Coronavirus, but Long-Term Picture Remains Bright
ETF Trends | May. 13 | Bond Finance | Green Finance | Green Bonds | Green Bonds

U.S. Fossil Fuel Giants Set for a Coronavirus Bond Bailout Bonanza
The Guardian | May. 12 | Bond Finance | Disaster Recovery & Relief | Energy Finance | Federal | COVID-19

Alabama Lawmakers Approve $1.25B School Bond Issue
Tribune Interactive | May. 11 | Bond Finance | Social Finance | Education

Monroe, MI Voters Approve $59M for Schools
The Monroe News | May. 11 | Bond Finance | Social Finance | Education

Tray Hairston Featured on "We Are Jobs" Podcast on Economic Development & Bonds
Butler Snow LLP | May. 8 | Bond Finance | Member News

SEC Chair and OMS Director Issue Joint Statement Encouraging COVID-19 Disclosure by Municipal Issuers
Lexology | May. 8 | Bond Finance | Disaster Recovery & Relief | COVID-19

Fitch Downgrades Maryland Purple Line Transit's PABs & TIFIA to 'BB' on Negative Watch
Fitch Ratings | May. 8 | Bond Finance | Infrastructure Finance

North Spencer, IN to Use Bonds to Renovate Elementaries
The Herald | May. 5 | Bond Finance | Social Finance | Education

Franklin County, OH Voters Approve Columbus State Community College's $300M Bond Issue
Columbus Business First | Apr. 30 | Bond Finance | Social Finance | Education

Strong Resiliency and Liquidity of Toll Roads Offset Some of Coronavirus's Credit Negative Effects
Moody's Analytics | Apr. 28 | Bond Finance | Infrastructure Finance

Public Power Utilities Remains Stable but Will Likely Face Lower Liquidity and Coverage
Moody's Analytics | Apr. 28 | Bond Finance | Energy Finance

Kansas City, MO Proceeds with $43M Soccer Park
The Kansas City Star | Apr. 27 | Bond Finance | Disaster Recovery & Relief | Tax Increment Finance (TIF) | COVID-19

Council Gives Green Light to TIF Project
McCook Gazette | Apr. 23 | Bond Finance | Tax Increment Finance (TIF)

Bond Issue Puts Financing in Place for New Columbia Regional Airport Terminal
Missourian | Apr. 20 | Bond Finance | Infrastructure Finance

Highlights from the Online Resource Database

COVID-19 Weekly Briefing - State of the Bond Issuers
Bond Finance | Disaster Recovery & Relief | Legislative | Webcasts
During the May 15, 2020 Weekly COVID-19 Development Finance Briefing, three top bond issuers discussed how issuers are faring during the COVID-19 crisis, the state of issuers' portfolios, issuers' concern about default risk, and how issuing authorities are managing long-term economic concerns related to state and local government budgets as well as their own budgets.

Municipal Liquidity Facility Term Sheet - May 11, 2020
Bond Finance | Disaster Recovery & Relief
This is a term sheet for the Federal Reserve Bank's Municipal Liquidity Facility. It was updated on May 11, 2020.

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


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