California Gives Wells Fargo First Bond Deal Since Accounts Scandal

The video discusses Wells Fargo's re-entry into the California market after a ban on negotiated deals was lifted. It highlights the shift from tax-exempt to taxable market issuance, particularly in California, driven by tax reforms and low interest rates. The trend towards covenant light deals is examined, focusing on investor protection. The video concludes with insights into the higher education segment, noting an increase in taxable issuance for capital projects and leveraging endowments.

What was one of the ways Wells Fargo supported California during the ban on negotiated deals?

• By partnering with other states for deals

• By funding emergency repairs for the Oroville Dam

• By reducing interest rates for all loans

• By increasing tax-exempt issuance

What trend is California leading in the municipal market?

• Rise in interest rates

• Decrease in municipal bonds

• Shift towards taxable issuance

• Increase in tax-exempt issuance

What has been a major factor driving the increase in taxable issuance?

• Increased state funding

• 2017 tax reform

• Rising inflation rates

• High credit spreads

What is a characteristic of the recent covenant-light deals?

• They include strict financial covenants

• They are only available to AAA-rated borrowers

• They allow issuers to access funds without covenants

• They are primarily for short-term projects

What is expected from higher education institutions in terms of issuance?

• Focus on tax-exempt bonds

• Short-term bond issues

• Long-term taxable issuance and leveraging endowments

• A decrease in taxable issuance