Trump’s return, SEC’s role in muni disclosures: Top news November 2024

November’s roundup of pressing items in the public finance market includes expert predictions following Donald Trump’s reelection, the prospect of involving the Securities and Exchange Commission to oversee issuer disclosure and more.

Click here to read October’s grouping of top news.

All eyes on House as GOP sweep poses threat to muni market

Article by Caitlin Devitt, Scott Sowers, Layla Kennington and Jessica Lerner

Municipal market participants digesting former President Donald Trump’s victory and the GOP takeover of the Senate were keeping their eyes pinned on the House in hopes of avoiding a unified grip on power that would usher in major tax policy changes next year.

“If the Republicans retain the majority [in the House] then the municipal bond community must go into full gear,” said Charles Samuels, attorney at Mintz who is counsel to the National Association of Health & Educational Facilities Finance Authorities.

“New and old Republican members of the Congress need to understand at the individual state and district level the significance, impact and benefit of municipal bonds of all types,” Samuels said. “Anyone in the muni bond sector who doesn’t get energized in advocacy in the new political environment either should retire or look for a new job.”

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A wary municipal market ponders post-election threats

Article by Caitlin Devitt

Market participants are gaming out scenarios in a post-election municipal landscape, pondering potential shifts in the investor base, borrowing costs and whether the Trump administration takes a scalpel or an ax to infrastructure finance tools.

President Donald Trump’s victory, coupled with the Republican takeover of the Senate and the House, represented in some ways the worst outcome for the municipal bond market, which fears a Red sweep will usher in major tax changes next year.

The likely trifecta also hearkens back to the last Republican sweep, in 2016, which led to the Tax Cuts and Jobs Act, legislation that axed tax-exempt advance refunding and briefly flirted with the elimination of tax-exempt private-activity bonds.

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Muni disclosure: Time to bring in SEC?

Article by Caitlin Devitt

After decades of what investors see as inadequate disclosure from cities, towns and states, it’s time to consider a fundamental change in the $4 trillion municipal bond market: direct federal oversight.

That’s the argument from a pair of market veterans who admit it’s a provocative position for a market that is famously distinctive in its power of self-regulation.

Issuers and their bond counsel, unsurprisingly, are dead set against the proposal.

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New York VRDO rate-rigging case against Wall Street banks advances

Article by Caitlin Devitt

A mediation session was set, as a long-standing lawsuit charging Wall Street banks with rigging New York’s variable-rate bonds inched forward.

The New York case is one of four state-level lawsuits brought by Minnesota-based municipal advisor Johan Rosenberg, who filed them under the name of a Delaware-incorporated entity called Edelweiss Fund LLC. Edelweiss sued on behalf of the states and their entities that issued variable-rate debt and entered into contracts with banks as remarketing agents and liquidity providers.

The Illinois case was settled last October for $70 million, of which $48 million went to the state and $14.4 million to Edelweiss. The California case remains in discovery and a judge in the New Jersey case recently ruled in favor of Edelweiss on a public disclosure question; the banks have appealed that ruling.

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‘Unicorn’ Thomas Jefferson University prices a billion-dollar deal

Article by Christina Baker

The healthcare and higher education sectors have struggled for years. But Thomas Jefferson University is forging ahead. 

The Philadelphia-based university, which runs the growing Jefferson Health hospital network, priced $1 billion of refunding revenue bonds.

The system has dodged many of the pressures on its industries, carrying out a string of acquisitions and growing its market share in a crowded Philadelphia healthcare system. 

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Anatomy of a deal: JFK New Terminal One’s Northeast winner

Article by Christina Baker

The developers of New Terminal One at New York’s John F. Kennedy International Airport are in the position that any salesperson would want: they have something you can’t find anywhere else.

It’s the biggest airport public-private partnership in the country and the only terminal in the country that solely serves international travel. 

That uniqueness, the NTO team learned this year, creates high demand, and allowed NTO to sell $4.5 billion of bonds in six months. 

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Bond election results: Props 2 and 4 poised for victory

Article by Gary Siegel and Jessica Lerner

Voters appeared to approve California Propositions 2 and 4, each authorizing $10 billion of bonds, for school bonds and climate change mitigation, respectively, while the Los Angeles Unified School District appears on pace to receive voter approval for $9 billion of bonds. San Diego Community College District voters appeared to approve $3.5 billion of bonds. San Jose Unified School District will be able to sell $1.15 billion for facility upgrades.

Houston Independent School District voters rejected two issues — $3.96 billion for expansion and $440 million for technology.

Voters were asked to consider at least $148.91 billion of bonds this year in 908 ballot referendums, according to data compiled by Bond Buyer.

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Private jet operator Million Air preps high-yield borrowing

Article by Caitlin Devitt

Private jet servicer Million Air is preparing to tap the high-yield municipal market with a structure that will likely feature so-called Cinderella bonds as the borrower works to overcome a snag with securing tax exemption on the bonds.

The new-money piece will finance expansions at the company’s facilities at the Austin-Bergstrom International Airport in Austin, Texas, and the Florida Keys’ Marathon International Airport.

The unrated transaction marks the fourth borrowing over more than a decade for the Houston-based fixed-base operator, which provides private luxury jet services ranging from aircraft fueling and parking to lounge and theater space at dozens of airports.

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FINRA fines Rudy Mejia Jr. $10,000

Article by Connor Hussey

The Financial Industry Regulatory Authority has fined Rudy Mejia Jr., chief executive and founder of Austin-based Nickel Hayden Advisors, $10,000 for involving himself in the sale of $738,000 in limited partnership interests of a pooled investment fund he co-founded and co-managed.

In addition to the sale to seven different investors, Mejia purchased $100,000 worth of the limited partnership interests himself and did not disclose the sale to Estrada Hinojosa & Company, his former employer. Mejia also executed 304 transactions on behalf of the investment fund and did not inform his former employer or seek permission.

Mejia is a West Point graduate and former U.S. Army captain and was a Bond Buyer Rising Star in 2019 as a young public finance banker. After breaking with Estrada Hinojosa, he formed his own firm, Nickel Hayden Advisors. 

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Public finance leaders brace for Trump transition

Article by Scott Sowers

The election results have public finance leaders making plans for addressing key issues vital to the municipal bond market.  

“The most oblivious and pressing issue is preserving and protecting all tax-exempt bonds during any attempt at tax reform,” said Toby Rittner, president and CEO of the Council of Development Finance Agencies.  

“We feel the coalition around this is strong and vocal, but we will continue to push this issue should the tax-exemption come under attack again.”  

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