Vol. 392 No. 35337 N.Y., N.Y. THE DAILY NEWSPAPER OF PUBLIC FINANCE Monday, July 6, 2020 MONDAY PROMESA’s Grassley is www.bondbuyer.com Future is THE REGIONS Disinclined THE PORT AUTHORITY OF NEW YORK and New Jersey’s decision to Debated issue $1.1 billion in taxable BY ROBERT SLAVIN notes this week underscores To Add Aid the multi-year revenue chal- The second of three stories lenges confronting the bi-state marking the anniversary of BY SARAH WYNN agency.. 4 PROMESA. Among the observers con- The chair of the Senate’s pow- THE PUBLIC AGENCY THAT MANAGES cerned over the Puerto Rico erful Finance Committee said he is St. Louis public transit hits Oversight, Management, and open to discussing more flexibility the market as soon as Tuesday Economic Stability Act and the for how states and localities access with a refunding to ease Oversight Board it created, a few federal aid, though he is skeptical near-term COVID-19-induced advocate changing the law, and that issuers actually need the aid revenue strains. The Missouri- some even want it abolished. they are asking for. Illinois Metropolitan Bi-State However, most participants Sen. Chuck Grassley, R- Iowa, noted that because of the cur- Julio Lopez Varona of the Center for Popular Democracy is among those made those comments Wednesday Development Agency is selling rent climate in Washington, in an calling for the abolition of PROMESA. on the Senate floor, casting doubt $171 million of combined lien election year, any alterations to on the prospects for additional mass transit sales tax appro- PROMESA are highly unlikely said. However, for the time being well as create a publicly-funded funding states and municipalities priation refunding bonds, of in 2020. it is “pie in the sky.” commission to audit Puerto Ri- say is crucial for their financial which $13 million are tax-ex- There may be the possibility Puerto Rico Oversight Board co’s debt. stability. empts and $158 million are of changing the law for the better Executive Director Natalie Jar- Jaresko said the board sup- “At this point, I believe that it taxables.. 4 when a new Congress and pos- esko said that the board hasn’t ported some of the changes and may be useful to entertain more sibly a new president are seated called for any changes. House opposed others. flexibility in what has already THE ECONOMY in January, University of Puerto Natural Resources Committee “In my view the danger when been approved,” Grassley said. Rico professor José Javier Colón Chairman Raúl Grijalva in May you start tinkering with it is that Municipalities have asked for THURSDAY’S EMPLOYMENT REPORT introduced H.R. 6975 to amend you’ll unleash unintended con- more flexibility in how they spend exceeded expectations, as jobs PROMESA. Grijalva’s Amend- sequences and make it worse their federal money, such as using were added and the unemploy- THURSDAY’S YIELDS ments to PROMESA Act gives rather than better,” said Puerto funds to cover revenue losses. ment rate fell for the second Rico Oversight Board member The Bond Buyer 40 Puerto Rico the option to dis- Grassley added that there may month in a row. 2 charge unsecured debt if it is David Skeel. “And so if there be a need to make sure states send 5.3 deemed to be a financially ex- were some enormous flaw in the money they received to counties WEB EXCLUSIVES 4.5 To Maturity cessive burden. law, some obvious thing that is and cities. 3.63 Unchanged The bill also would prioritize simply unworkable, I would say “There may even be a reasoned PUERTO RICO BANKRUPTCY JUDGE 3.7 funding for public health care, we should have conversations case for limited additional funding Laura Taylor Swain reject- education, safety, pensions and about changing it. But I don’t to states and localities in the near ed three related claims of 2.9 the University of Puerto Rico as Turn to Should page 3 Turn to Finance page 3 bondholder liens on broad 2.1 To Par Call categories of commonwealth 2.63 Unchanged revenues. 1.3 06/19 06/24 06/29 07/02 Boston Faces Biggest Project Since the ‘Big Dig’ PODCAST: MARC PFEFFER, CHIEF 5.5 investment officer at CLS BY PAUL BURTON Investments, talks about 5.0 today’s municipal bond market 4.5 Massachusetts transportation 4.0 and looks to the future. He officials have spent nearly six 3.5 looks at the advantages of buy- years trying to thread a needle 3.0 ing into exchange traded funds and now time is running short. 2.5 and sees value in individual “The time has come to make 2.0 a decision, not study alterna- names, while stressing rigorous 1.5 tives in perpetuity,” state trans- credit analysis by investors. JJMAMFJDNOSA portation Commissioner Steph- Chip Barnett hosts. Complete market coverage appears on page 2 anie Pollack said of the Allston Multimodal Project at the June 22 joint meeting of the Depart- ment of Transportation and the Massachusetts Bay Transporta- tion Authority’s Fiscal Manage- ment and Control Board. The project would fix a worn-down swerving viaduct on the Massachusetts Turnpike MassDOT — Interstate 90 — in Boston’s Allston neighborhood. This 2017 project illustrates the tight quarters the Massachusetts Turn to Massachusetts page 5 Turnpike must negotiate through this crowded part of Boston. 001_BB070620 1 7/2/2020 4:38:52 PM Market News Monday, July 6, 2020 2 The Bond Buyer Chunky Supply Awaits Muni Primary This Post-Holiday Week When market participants return to Traders and analysts noted PRIMARY MARKET Proceeds will be used to provide effec- work after the long holiday weekend, the holiday-shortened week tive cash flow management for the city’s they will see a chunky slate of supply has had munis in a holding The Regents of the Uni- general fund revenues and expenditures waiting for them as issuers take advan- pattern. versity of California (Aa2/ in fiscal 2020-2021 and to make the tage of low rates and a stable market- “Very attractive muni-U.S. AA/AA/NR) is heading to city’s annual contribution to the fire and place. Treasury ratios, little to no market with a $2.32 billion police departments’ pension plan and to Offerings from issuers in California, supply, and seven weeks of tax-exempt and taxable rev- the city employees’ retirement system. Oregon and Washington state top the inflows are underpinning enue bond deal. Additionally, the Asante Health Sys- calendar, headlined by a $2.3 billion solid support despite many JPMorgan Securities is ex- tem Obligated Group’s (NR/A+/A+/NR), University of California offering. participants reporting that pected to price the $790.45 $450 million of revenue and refunding IHS Ipreo estimates weekly volume at they don’t ‘love’ current million of exempt Series BE, bonds for the Medford Hospital Facili- $7.38 billion, consisting of $6.20 billion yields and are hoping things BY CHIP BARNETT $328.305 million of taxable ties Authority, Ore., is set to be priced of negotiated deals and $1.18 billion of back up a bit before becom- Series BF and $1.2 billion of by JPMorgan on Tuesday competitive sales. ing more active,” said Greg taxable Series BG on Thurs- RBC Capital Markets is expected to In secondary trading, municipals fin- Saulnier, managing analyst, municipal day. price the Tacoma School District Num- ished out the week little changed on tri- bonds, at Refinitiv TM3/MMD. Proceeds of the Series BE and Series ber 10, Wash.’s (Aaa/AA+//) $432 mil- ple-A benchmarks as the market closed “Month/quarter-end amid a holi- BF bonds will be used to finance or re- lion of taxable GO refunding bonds on early ahead of the holiday. day-shortened week is undoubtedly hav- finance certain projects of the university Wednesday. The deal is backed by the Yields have essentially remained flat ing an impact on overall flows, but pri- including refunding bonds; proceeds of Washington state credit enhancement since mid-June as the market has di- mary deals continue to be well received the BG bonds will be used for the univer- program. gested new issues well and investors so I think munis are just circling the sity’s working capital purposes. Also on tap is a $353.895 million gen- are starved for paper, especially tax-ex- wagons until traders return post-holi- The City of Los Angeles, Calif., eral obligation taxable bond deal from empts. day,” Saulnier said. (MIG1/SP1+/NR/NR) is coming to mar- the state of Oregon (Aa1/AA+/AA+/ ket with a $1.78 billion note deal. NR). Citigroup is set to price the Series JPMorgan is set to price the tax and 2020-O and Series 2020–Q taxable GO A ‘Blockbuster’ Jobs Report Though revenue anticipation notes on Tuesday. refunding bonds on Wednesday. q Correction COVID-19 Still Weighs on Economy Thursday’s story, “Pair Quits Oversight Board,” incorrectly stated the day of the week the Oversight Board meeting and the resignation announcements took place. They Thursday’s employment re- Great Recession of a decade happened on Wednesday. port exceeded expectations, as ago,” Hamrick said. “Includ- The board also approved budgets for fiscal year 2021. The year was unclear because jobs were added and the un- ing the correction related to the of a typo. employment rate fell for the continued challenges associated second month in a row. with classifying those who are This news shows improve- absent from work, the jobless Major Deals This Week ments in the labor market rate was lower but still elevated reflected in the continued at 12% or so.