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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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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
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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
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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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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AMR-Backed Municipal Airport Bonds Decline on Bankruptcy Filing |
Bloomberg Businessweek - Nov. 30, 2011 -- With assistance from Mike Lee in Dallas and Chris Cappucci in Princeton, New Jersey. Editors: Ted Bunker, Pete Young.
Municipal securities backed by American Airlines parent AMR Corp. dropped as much as 68 percent after the third-largest U.S. carrier declared bankruptcy.
AMR's $3.2 billion of debt backing airport facilities may not have much effect on municipal defaults this year, because it isn't clear how much will be abandoned, according to analysts including Phil Villaluz, managing director of municipal research for Sterne Agee & Leach Inc. in New York.
AMR and American sold tax-exempt securities called special- facilities bonds through airports and municipal authorities to pay for gates and maintenance hangars in cities such as New York, Los Angeles and Dallas. American became the final large U.S. full-fare airline to seek court protection following the Sept. 11 terrorist attacks. It listed $29.6 billion in debts in U.S. Bankruptcy Court papers filed yesterday in Manhattan.
“We're already seeing secured bonds getting hit,” Villaluz said. “The outcome will depend on whether American wants to keep these facilities or walk away.”
An unsecured bond maturing in December 2029 that backed maintenance facilities at Fort Worth's Alliance Airport sank 67 percent to 17.2 cents on the dollar yesterday from 52.5 cents Nov. 21, data compiled by Bloomberg show. A New York City Industrial Development Agency bond maturing in August 2031 and sold for American in 2005 fell 16 percent to 75.9 cents on the dollar from 94 cents Oct. 27. The bonds are secured by leases.
Whitney's Outlook
Meredith Whitney, the banking analyst who correctly called Citigroup Inc.'s 2008 dividend cut, last year predicted “hundreds of billions of dollars” of municipal defaults this year. Bondholders may not know whether payments will be missed on their investments until Fort Worth-based AMR decides what it plans to do with facilities financed with the debt, said Richard Lehmann, publisher of the Distressed Debt Securities Newsletter.
“It's a huge amount of debt,” Lehmann said by telephone from Miami Lakes, Florida. “Whether they suspend debt is the question. I don't think they will, because they will need these gates.”
AMR lists on its balance sheet the $1.6 billion it guarantees. The rest relies on leases and other financing structures for the facilities it financed. The company may try to use the bankruptcy to wipe out some of its debt, yet if it decides to continue operating in a city, it probably will cover payments tied to that area, said James Spiotto, a partner with Chapman & Cutler in Chicago. He has worked on municipal bond holdings involving other airlines that entered bankruptcy.
For the complete article.
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