This week (June 3 – 10, 2011) saw more of news about the US government’s Battle with the slowing economy. An improvement in new issuance. This may be a good time to adjust your asset allocation. The Week’s municipal bond news included:
- Signs of a Muni Bond revival – A 2011 high of $5 billion of new municipal bond issuance was expected last week. With investors waiting to reinvest their cash, this is a good time for new issues to appear and a good test to see how strong the municipal bond market really is.
- Rattled by Lehman-Again – The firm winding down the estate of bankrupt Lehman Brothers is set to sell a large portfolio of credit full squats on about $3 billion worth of municipal bond debt from several states, in the coming months. This prospect has already driven down credit default swap prices in several states including California, even though municipal risks still abound.