Smith's Research & Gradings

Q3 Ratings Upgrades and Downgrades

The High Grade Municipal Bond Portfolio managers basked in the warm sunshine of steady credit quality while high-yield municipal bond funds saw massive outflows.

Mark Paris, CIO, Head of Municipals at Invesco, hosted an investor call on March 30, 2020. Eddie Bernhardt, head of managed accounts joined him for the presentation.

Invesco purchased Rochester Funds last year and 2019 was a period of consolidation after the acquisition. The newly combined entity has over $60 bln. in Municipal Assets Under Management. Mr. Paris heads up a municipal bond team that includes 15 portfolio managers including Jim Phillips, Jack Connelly and Scott Cottier. Invesco's municipal credit research is lead by Mark Gilley, CFA (27 years of experience) and the team includes Angela Uttaro, Mark Stockwell, Mary Jane Minier, and Robert Bertucci. The Quant Research & Portfolio Analytics are lead by Casey Ryan and Michal Milewski.

Invesco emphasized the demand for tax-exempt municipal bonds had experienced unprecedented growth. The reasons for the record weekly inflows were due to a myriad of factors, starting with the Trump Tax-Reform's elimination of State and Local Tax Deductions. Falling interest rates and collapsing credit spreads contributed to a strong performance for municipal bond funds.

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FOMB Commits to No Cuts to Public Pensions

A letter sent by the Financial Oversight and Management Board for Puerto Rico to the Governor and the Legislature, commits to no cuts to public pensions.

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Treasury Secretary to Close COVID-19 Lending Facilities

On Thursday, November 19, Treasury Secretary Mnuchin sent a letter to Fed Chair Powell indicating that he would be allowing most of the Fed's 13(3) emergency lending facilities to expire at year-end, and requesting that the Fed "return unused funds to the Treasury" in order for Congress to "re-appropriate $455 billion, consisting of $429 billion in excess Treasury funds for the Federal Reserve facilities and $26 billion in unused Treasury direct loan funds."

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Yankee Stadium Bonds Baa1/NR/BBB+

Fitch Ratings assigned a 'BBB+' rating to the New York City Industrial Development Agency's (NYC IDA) $923 million PILOT Revenue Refunding Bonds,Series 2020, Yankee Stadium Project. Fitch has also affirmed the 'BBB+' rating on the Series 2006 and 2009 bonds, as well as the NYCIDA's Series 2006 and 2009 Rental Revenue Bonds, issued on behalf of Yankee Stadium LLC (StadCo). The Rating Outlook is Stable. The transaction will refund $863 million Series 2006 and 2009 bonds, generating more than $200 million in present value savings.

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