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Abstract: 

With the recent market turbulence, investors have become more discerning. Should an A- or BBB-rated hospital with no mortgage or debt service reserve fund price better than a similarly rated tax backed credit, university, or charter school? But wait, one credit has more cash, the other has more coverage, the other has a tax base! If each had the same rating, which one should the portfolio manager choose? This panel discusses distinctions between rating, collateral, and coverage in various municipal sectors and market feedback loops to price and trade bonds in 2023’s primary and secondary markets. Yaffa Rattner is Senior Managing Director at Hilltop Securities. Jason Appleson is Head of Municipal Bonds at PGIM Fixed Income. John Henningsgard is Managing Director and Co-Head of the Public Finance Healthcare Group at Piper Sandler & Co. Elizabeth Funk is Managing Director at Mesirow Financial. This article is based on a panel by the same title presented at the 2023 Annual Conference of the National Federation of Municipal Analysts, held May 16-19, 2023.

Keywords: Collateral Packages; Covenants; Pricing; Rating Equivalence and Pricing; Multiple Ratings and Liquidity

Affiliations:  1: Hilltop Securities; 2: PGIM Fixed Income; 3: Piper Sandler & Co; 4: Mesirow Financial.