California, New York Bond Deals Test Demand for SALT Tax Havens

The video discusses the impact of recent tax law changes on the municipal bond market, highlighting increased demand from investors in high-tax states. This demand has led to tighter spreads and lower borrowing costs for states like California and New York. Despite high demand, supply is not keeping pace, presenting an opportunity for local governments to issue bonds at attractive rates. However, states remain cautious in their borrowing strategies to avoid excessive debt.

What has been the overarching story in the municipal bond market in 2019?

• Stable demand and supply

• Decrease in demand for municipal bonds

• Increase in demand from wealthy individuals in high-tax states

• Decline in Muni mutual funds

How has the increased demand for municipal bonds affected the yields?

• Yields have become unpredictable

• Spreads have tightened, leading to lower borrowing costs

• Yields have increased significantly

• Yields have remained unchanged

What is the current situation regarding the supply of municipal bonds?

• Supply is meeting demand

• Demand is four times the supply

• Supply is exceeding demand

• Supply and demand are balanced

What opportunity does the current market present to mayors and governors?

• To reduce taxes

• To sell bonds at attractive levels

• To increase borrowing costs

• To decrease demand for bonds

How are state and local governments responding to the high demand for municipal bonds?

• By increasing taxes

• By reducing the supply of bonds

• By being cautious and not unveiling major borrowing plans

• By issuing large amounts of new debt