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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
|
3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
|
848.03 |
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S&P U.S. Preferred Stock Index (CAD)
|
636.26 |
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S&P U.S. Preferred Stock Index (TR)
|
1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
|---|
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Muni issuers drop Dexia as euro crisis hits home |
Reuters - Oct. 4, 2011 - By Karen Pierog
U.S. states, cities and other issuers in the municipal bond market are increasingly dropping credit back-ups provided by Belgian-French financial group Dexia as the euro zone crisis creeps onto American shores.
Dexia (DEXI.BR), which has been laid low by its heavy exposure to Greek debt and problems accessing wholesale funds, itself is urging U.S. issuers to replace these liquidity facilities as it unwinds its legacy business in munis.
"Our exposure (to the U.S. muni market) has been diminished significantly, and that was a deliberate choice on our part," Guy Cools, general manager of Dexia Credit Local's New York branch, told Reuters on Tuesday.
Liquidity provided by Dexia once supported $54 billion of muni debt, according to Cools, who said that amount has now shrunk to $9.6 billion.
These agreements are akin to insurance for muni bond issuers. But these issuers, facing higher borrowing costs for Dexia-supported debt as a result of Dexia's problems, are replacing these backstops or are letting them expire.
France and Belgium, which are both shareholders in Dexia, said on Tuesday they will bail out Dexia as officials prepare a rescue plan designed to stop the bank's troubles from expanding to other European banks. Dexia's worsening credit profile would have hit muni issuers' interest rate costs.
Moody's Investors Service warned on Monday it could downgrade Dexia's credit ratings, citing concerns over "further deterioration in the liquidity position of the group in light of the worsening funding conditions in the wide market."
Dexia officially stopped backing new U.S. muni debt after 2008 for various reasons, including a lack of enough liquidity in U.S. dollars and stricter capital and other requirements under Basel III, Cools said.
Dexia was the top foreign bank letter-of-credit provider for new muni debt issuance in 2008 when it backed $4.8 billion of debt in 46 issues, according to Thomson Reuters data, through letters of credit, standby bond purchase agreements and other liquidity facilities.
Issuers of variable-rate demand obligations need the facilities to serve as a line of credit if remarketing of the debt, usually on a weekly basis, fails to find new buyers.
The liquidity concerns that necessitated a bailout of Dexia would have caused large increases in borrowing costs for local governments and other issuers.
For the complete article.
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