Analysis and Commentary

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Detroit Progress and Value of Bond Insurance

On April 9, 2014, Assured Guaranty, National Public Finance, and Ambac came to agreement with the City of Detroit regarding the Unlimited Tax General Obligation bonds. As you may recall, Judge Rhodes told all parties that they should negotiate a settlement or he would make a ruling that was “all or none”, meaning one party would win outright. With that in mind the parties came to a settlement whereby the Insurers will receive $0.74 on the dollar for the bonds backed by the voter approved unlimited tax lien. While this is not the full value that the insurers believe they are entitled to under the Indenture, it is much higher than the $0.15 that was proposed in the Amended Bankruptcy Plan. The remaining $0.26 will be earmarked for City pensioners. . . . Click for more.

2014 Corporate Bond Market Trends

In this week’s edition of corporate insights we will take a look at the investment grade corporate market technicals. Total primary issuance through the end of February totaled $ 274 billion, which is 9% below the comparable period a year ago. The decline may be attributable to lower refinancing needs by corporations after several years of solid primary issuance which have pushed out their maturity schedules. After eight straight months of outflows, investors returned to the market as inflows totaled $2.1 billion in February. . .Click for more.

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