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Harvey, Ill., believes it can meet a June bondholder settlement deadline to restructure defaulted debt even as work continues to resolve litigation its long been mired in with Chicago over its water supply, the Bond Buyer reported. The fiscally struggling Chicago suburb hired the advisory firm Meristem Advisors LLC last year and in July began working with Loop Capital Markets LLC as its investment banker on debt restructuring options. A refinancing represented the cornerstone of a consent agreement with some its 2007 bondholders who had sued to intercept city revenue to resolve defaults. The city has worked this year to lay the groundwork for the restructuring by posting financial results and notices on defaulted principal and interest payments and other delinquencies that were long absent from the public’s view in addition to a public notice on the potential refinancing.

Illinois’s $400 million municipal bond sale Wednesday is the first in a string of sales from issuers in the Land of Lincoln this month as the state’s cost to tap the $4 trillion market has shrunk following an improved outlook on increased revenue and billions in federal aid, Bloomberg News reported. “Illinois was able to get much improved spreads in rates compared to where they were a year ago based upon their more positive outlook and the strong demand for incremental yield in the market right now,” said Dan Solender, director of tax free fixed income investments for Lord, Abbett & Co., which holds $36 billion in muni assets including Illinois debt. Deals this week also are benefiting from a drop in Treasuries, he said. The state sold $400 million in tax-exempt bonds through a competitive deal and saw the penalties over benchmark municipal securities drop sharply from a year ago, according to data compiled by Bloomberg. Morgan Stanley purchased one $200 million series with spreads ranging from 17 basis points for debt maturing next year to 52 basis points for bonds due in 2031 with 5% coupons. Barclays bought the remaining bonds with spreads ranging from 54 basis points for debt with a 5% coupon maturing in 2032 to 116 basis points for bond due in 2041 with a 3% coupon. Around this time last year Illinois paid much more to borrow from the muni market. In October 2020, a competitive tax-exempt sale by the state drew spreads ranging from 97 to 294 basis points. At that time, Illinois was feeling pressures from the pandemic layered on top of years of self-inflicted financial woes.

Voters across the U.S. are slated to approve at least $12.6 billion of local-government debt sales on ballots this election, according to preliminary results after Tuesday’s polling, Bloomberg News reported. All in all, voters were asked to decide on about $27 billion of municipal bonds, the lowest tally since 2017, according to data compiled by IHS Markit. The largest measures up for vote were set to fund work ranging from school construction to flood-prevention measures in Virginia Beach. Early results showed more bond proposals passing than failing, but many of the races were tight, with some decided by just a handful of votes. At least $5.1 billion of bonds failed or were failing, according to Bloomberg calculations. “Voters in the races this year seem to want government to move more slowly with projects,” said Dan Solender, head of municipals at Lord Abbett & Co. “There has also been a lot of talk about raising taxes too, so maybe some voters are concerned that if they approve these bond issues, it might lead to more taxes.” Fort Worth, Texas, voters were torn over a $1.2 billion bond to fund construction and renovation of schools in Fort Worth Independent School District. It’s the biggest measure up for consideration this year and part of a nearly $1.5 billion package of debt. The measure was ahead by about 40 votes, according to unofficial results updated Wednesday after midnight, with around 25,000 ballots cast for the proposition altogether.

Residents of Norwich, Connecticut, will vote Tuesday on whether to gamble with their tax dollars by issuing bonds to cover swelling pension obligations, amid a record year for sales of such debt, Bloomberg News reported. Voters are being asked to approve issuing $145 million of securities to cover Norwich’s pension obligation, after retirement costs almost tripled in the past decade. With interest rates in the municipal market near historic lows, officials expect the earnings from investing that sum will exceed the borrowing cost. “In my 63 years of existence, 32 years of which was in the banking industry, I have never seen interest rates this low,” said Michael Gualtieri, treasurer of the city of about 40,000 in southeastern Connecticut. “I don’t know if we will ever see them this low again or perhaps in my lifetime.” Ninety-three municipalities have sold debt in 2021 to finance their unfunded pension obligations to retirees, the highest number year-to-date in records starting in 1999, data compiled by Bloomberg show. The combined amount of $11.4 billion is the most since a peak in 2003, which included a $10 billion Illinois sale. The push comes amid expectations that the Federal Reserve will announce a taper of its bond purchases this week and raise its benchmark rate from near zero next year.

A stalemate between New York and New Jersey on how to divvy up federal coronavirus relief funds for public transit may force New York City’s subway system to borrow as much as $4 billion in short-term debt to cover operating costs, Bloomberg News reported. The Metropolitan Transportation Authority, the largest public transit system in the U.S., is considering issuing the short-term debt as officials work to resolve a dispute with New Jersey over federal funds allocated to the region’s mass transit providers. Congress approved the funding for the region in two coronavirus relief packages, with the states responsible for dividing up the money. “The regional allocation, what’s referred to as the whack up between the states of New York, New Jersey and Connecticut, is not resolved and due to that continuing issue we need that money sooner,” Pat McCoy, MTA’s deputy chief, financial services, said yesterday during the agency’s monthly finance committee meeting. The standoff is delaying the MTA’s receipt of $10.5 billion of federal aid that it needs to cover lost revenue during the pandemic, when subway ridership plunged by as much as 90%. The states must decide how to allocate the funds by Nov. 8 to participate in a $2.2 billion pot of federal discretionary funds for mass transit systems hit hardest by Covid. “We do anticipate resolution soon,” McCoy said. “I would anticipate by Nov. 8 because that’s when we need to file application papers for a $2.2 billion competitive or discretionary grant for coronavirus support.”

U.S. state and local governments are projected to issue approximately $18 billion in bonded debt over the next month, according to data compiled by Bloomberg. This is the biggest 30-day supply in almost a year, with municipal bond sales peaking at $18.7 billion in November 2020. Investors said seasonal factors help explain the surge, citing states and cities seeking to get deals done before any potential delays during the holiday season as one of the main driving forces. The upward drift in supply is also likely a response to the threat of higher rates, according to municipal investors. Issuers are constantly on the lookout for refunding opportunities and taxable bonds have provided solid savings.