Muni Bank Debt
New municipal bond issuance is on the decline. A large factor contributing to the lack of supply is that municipalities are tightening their belt, however there is a more subtle contributor. Tax-exempt borrowers are increasingly using banks to finance their credit needs. The use of bank financing in the municipal market has many ramifications. . . Click for more.
Bond Market Evolution
For many years, the secondary fixed income market was an over-the-counter market. Broker-dealers would make markets in bonds, carry significant inventory and trades were done over the telephone. This was due to the asset class being diverse with over 3 million separate securities; by comparison there are only 6000 equities on exchanges. Also, bonds are not standardized, for example, having different coupons, maturity, call protection and ranking. . .Click for more.