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Smith's Research & Gradings
February 16, 2021

Smith's Research & Gradings

American Dreamers

American Dreamers

American Dream bondholders went on real roller coaster ride that rivals the mall's Nickelodeon Universe Theme park.
It started when the COVID-19 crisis shut down the American Dream mall from last March through August and prices plunged into the 80s the bonds.

Two weeks ago, the MSRB EMMA site featured a "failure to file notice".  Several analysts were quick to say, "It doesn't surprise me" and "I don't think we will hear good news."  Several waxed philosophical with lengthy descriptions of how COVID-19 has changed retail shopping
Yet the next day, American Dream filed an update (see below) that surprised almost everyone.  The American Dream mall showed positive traction starting in September and kept climbing through December.  The Grinch did not steal Christmas from American Dream.

Then, on February 9, the MSRB's EMMA website posted a trade with a customer selling the American Dream bonds at 106.657, or a 5.8% yield, and a customer buying a couple minutes later at 106.946, or a 5.75% yield.

"It was a $10 mln. block of bonds that traded around 3:30 (EST) in the afternoon," a source said. "The trade changed the evaluations and produce a 23% gain for American Dreamers."

Haters went wild after the news reported. Many suggested the trade was done between funds with a single family because of the timing. Others suggested it was a signal the municipal high yield bond market had hit a top.

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Negative Event Risk (-1)

Here Comes the Sun

Smith's is issuing an Event Risk for Solar Flares (+1) The Solar Cycle 25 reached its lowest level in 2020 and it has started climbing higher in 2021. Forecasts predict the Solar 25 Cycle will peak in 2025.

Beirut’s Agony: Ports, Food, and China

On August 4th the port of Beirut was the scene of a horrific explosion, which killed more than 150 people, injured 6,000 and left some 300,000 homeless. The damages are estimated to be in excess of $15 billion. The city’s hospitals, already struggling due to the COVID-19 pandemic, were damaged by the blast and swamped with injured. On top of already raging economic and political crises, the explosion now raises the question of food security. Prior to the explosion, 80 percent of Lebanon’s imports passed through Beirut’s port. Without a functioning port in Beirut, the country now relies on a handful of secondary ports, chief among them being Tripoli in the north, to import food and to export its products.

Clean Energy Needs Reliability Requirement

Clean energy needs to include reliability requirement as new technology advances. Transformation of the energy mix used in electricity generation globally has been focused on development of renewable sources of energy such as wind and solar, but the major stumbling block has remained reliability.

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