Missouri Circuit Court Judge James Van Amburg last week affirmed Platte County’s legal right to drop its appropriation pledge backing bonds issued for a struggling Kansas City mall, Debtwire’s Caitlin Devitt reported. The ruling, for now, ends the legal dispute over the county’s appropriation pledge on bonds issued in 2007 with trustee UMB Bank NA. The decision not to honor its appropriation pledge has cost the county several downgrades. Judge Van Amburg ruled in favor of the county’s motion for summary judgement in the case, which surrounds USD 32m in debt issued by the Platte County Industrial Development Authority for the Zona Rosa retail district. In September 2018, the county elected not to make the appropriation payment.
Preston Hollow requested a Delaware Chancery judge to make public transcripts of conversations between municipal market participants and Nuveen LLC employees in a case where Preston Hollow alleges the mutual fund giant engaged in an illegal scheme to cut its smaller competitor out of the municipal bond market, Debtwire’s Chuck Stanley reported. Preston Hollow has said the transcripts from six recorded conversations support its claim that Nuveen attempted to strong-arm Deutsche Bank and major broker-dealers into a conspiracy to starve the smaller firm out of the municipal bond market.
Connecticut lawmakers last week announced a tentative agreement on the state’s biennial budget framework, closing a USD 3.7bn, two-year deficit, Debtwire’s Maria Amante reported. Lawmakers agreed to reamortize the Teachers Retirement Fund and reduce the discount rate to 6.9% to 8%, and the state plans to continue building reserves to end FY19 with a USD 2.6bn balance. The state’s fiscal year begins 1 July. Lawmakers also noted last week that they would not pursue marijuana legalization this year, Amante reported.
The Metropolitan Pier and Exposition Authority (MetPier) privately placed USD 36.8m of bonds backed by a new credit with Morgan Stanley, with a second deal in the works, Debtwire’s Devitt reported. The transaction is the first where MetPier in Chicago borrowed from its net operating revenues base, and the move allows the authority to avoid both the ratings agencies and approval from the Illinois General Assembly. MetPier lost its AAA rating from S&P Global Ratings in 2015 when Illinois missed a monthly “set aside” payment due to an impasse on the state budget.
Chicago’s new mayor, Lori Lightfoot (D), is “smart” not to rule out property tax increases as the city begins to tackle its financial challenges, Debtwire’s Devitt reported. The newly minted chaiperson of the City Council Finance Committee, Alderman Scott Waguespack (D), told Devitt that improving the city’s bond ratings, and emphasizing predictability and stability are the city’s financial priorities. Lightfoot has so far released few details on how to tackle the Windy City’s financial headwinds, but has noted she is lobbying state lawmakers for a new casino and money from legalized, recreational marijuana and a graduated income tax.
There were 148,601 trades last week on a par amount of USD 49.26bn in the holiday-shortened week, compared to 175,634 trades the previous week on a par amount of USD 63.52bn.
The Bellwether is a weekly roundup of news and events that offer insight into developments or trends affecting municipalities and the bonds they issue (27 May to 31 May).