| Bonds Online |
 |
|
| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
|
S&P National Bond Index
|
3.00% |
|
|
S&P California Bond Index
|
2.96% |
|
|
S&P New York Bond Index
|
3.13% |
|
|
S&P National 0-5 Year Municipal Bond Index
|
0.70% |
|
|
| S&P/BGCantor US Treasury Bond |
400.09 |
|
| More |
|
| Income Equities: |
|---|
| Preferred Stocks |
|---|
|
S&P U.S. Preferred Stock Index
|
848.03 |
|
|
S&P U.S. Preferred Stock Index (CAD)
|
636.26 |
|
|
S&P U.S. Preferred Stock Index (TR)
|
1,701.05 |
|
|
S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
|
|
| REITs |
|---|
|
S&P REIT Index
|
174.07 |
|
|
S&P REIT Index (TR)
|
425.30 |
|
|
| MLPs |
|---|
|
S&P MLP Index
|
2,469.58 |
|
|
S&P MLP Index (TR)
|
5,428.50 |
|
|
See Data
|
|
|
|
 |
|
|
|
|
|
|
Cantor Fitzgerald to Enter Municipal Bond Market |
By Martin Z. Braun
Jan. 26 (Bloomberg) -- Cantor Fitzgerald LP, one of the 18 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York, said it was entering the U.S. municipal bond business as municipalities may issue record amounts of debt.
William O’Keefe, the former head of Morgan Stanley’s municipal bond department, will head the group, according to a news release today from the New York-based firm. O’Keefe, who retired in 2005, will be joined by seven others, including David McMahon, another Morgan Stanley veteran who will lead sales, and Sandy Carrithers, who has worked in trading, sales, and banking at Sterne Agee & Leach Inc. and Citigroup Inc.
“Bill O’Keefe solidifies our entry into the municipal bond market as we continue to expand our first-class capital markets business,” Cantor Chief Executive Officer Shawn Matthews said in a statement.
Cantor’s entry into the $2.8 trillion municipal bond market in banking and trading comes as states and local governments are poised to issue a record $450 billion in debt to fund roads, sewers and schools and turn to borrowing to help bridge budget deficits.
The municipal market has been boosted by the federal Build America Bonds program, which was created as part of the February 2009 economic stimulus. The federal government rebates 35 percent of the interest costs of Build America Bonds to states and local governments.
Recruitment Spree
Cantor, which was founded in 1945, lost 26 of the 30 employees in its municipal bond division in the Sept. 11, 2001, terrorist attacks, which devastated the firm. In all, 658 employees were killed. Cantor acted as a broker between dealers and didn’t underwrite bonds.
Cantor joins companies such as Memphis, Tennessee-based Morgan Keegan Inc. and Chicago-based Loop Capital Markets that have picked up bankers and traders after the biggest investment banks collapsed or were wounded because of the credit crisis.
New York-based broker Ramirez & Co. in 2008 hired Dan Keating, the former head of Bear Stearns Cos.’s municipal bond department, to lead its municipal group. He was joined by senior Bear Stearns bankers such as Robert Foran and John Young.
UBS AG closed its municipal bond business in 2008, firing about 280 people, some of whom went to work at smaller firms.
Matt Fabian, a senior analyst and managing director at Municipal Market Advisors, a Concord, Massachusetts-based research firm, said opportunities are opening up in investment banking following the demise of bond insurers such as MBIA Inc. and Ambac Financial Group Inc.
Bond Insurance
Without bond insurance, which allowed municipalities to get AAA ratings on their bonds and cheaper borrowing, municipal debt now takes more time to sell and traders can take advantage of greater volatility, Fabian said.
In addition, with the federal government facing a deficit of $1.35 trillion and state governments facing gaps of $350 billion during the next two years, demand for tax-exempt bonds will rise, Fabian said.
“More investors want access to tax-exempts with the tax hikes coming,” he said.
O’Keefe, an enthusiastic surfer, left Morgan Stanley in 2005 after 20 years at the firm. He has served on the Municipal Securities Rulemaking Board, the market’s self-regulator, and as chairman of the Bond Market Association’s municipal division. O’Keefe’s older brother is the actor, Michael O’Keefe, who played the caddy Danny Noonan in the 1980 comedy film “Caddyshack.”
McMahon left Morgan Stanley in 2008. Cantor’s municipal bond team also includes Chris Grinnell, who left Morgan Stanley in 2007 after 19 years at the firm, Steve Kennedy, Elizabeth Andreev, Kevin Steinhauer and Mike Allen.
--Editors: Walid el-Gabry, Mark Tannenbaum
To contact the reporter on this story: Martin Z. Braun in New York at +1-212-617-6849 or mbraun6@bloomberg.net
To contact the editor responsible for this story: Mark Tannenbaum at +1-212-617-1962 or mtannen@bloomberg.net.
|
|
|
|
|
|
| Partner Market Place |
|
|
|
| Stuff to look at |
Yield and Income Newsletter: A must have for income investors. subscribe NOW
S&P Commentary and Newsletters: S&P
|
|
| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
Keep up with monthly, in-depth coverage of fixed income market strategies, commentary, and insights as seen by our sources. Sign up for the free BondsOnline Advisor now!
Unsubscribe here [+] |
|
|
|
|
