SLGS Window Closed Friday, May 17
The U.S. Department of the Treasury has announced that it will close the SLGS window at 12:00 noon ET on Friday, May 17th, 2013, as the federal government approaches its statutory debt limit on Sunday, May 19, 2013. Subscriptions submitted before the window closes will be honored. The closure is one of several "extraordinary measures" that the Treasury uses to avoid a default when the debt limit is reached. Treasury Secretary Lew has said that these measures will be able to avoid default until after Labor Day, and some have speculated that default could be avoided into October or even November. Consequently, it is highly unlikely that the debt limit will be increased until the fall. Typically, the SLGS window reopens shortly after the debt limit is increased.
Bank Loan Disclosure Task Force Issues White Paper on Voluntary Secondary Market Disclosure about Bank Loans
On Wednesday, May 1, the municipal market’s Bank Loan Disclosure Task Force released its white paper regarding voluntary secondary market disclosure about bank loans. The increasing use by state and local government issuers and conduit borrowers of private bank loans since 2009 has led holders of publicly offered municipal securities and their representatives and the Municipal Securities Rulemaking Board to encourage issuers and borrowers to voluntarily post information about bank loans to the MSRB’s Electronic Municipal Market Access (EMMA)website.
Municipal market industry groups joined together to assist issuers, borrowers and their financial advisors and legal counsel in determining whether to disclose the incurrence of a bank loan on a voluntary basis and the extent of any such disclosure.
The Task Force was comprised of representatives from the American Bankers Association, the Bond Dealers of America, the Government Finance Officers Association, the Investment Company Institute, the National Association of Bond Lawyers, the National Association of Health and Educational Facilities Finance Authorities, the National Association of Independent Public Finance Advisors, the National Federation of Municipal Analysts and the Securities Industry and Financial Markets Association.
“This is a significant achievement which demonstrates the industry’s commitment to reach consensus on a framework to analyze important disclosure issues,” said NABL President-Elect Allen Robertson, a shareholder at Robinson, Bradshaw & Hinson, P.A. “The paper encourages careful consideration of making voluntary disclosure about bank loans, while acknowledging that issuers and borrowers may conclude not to provide voluntary disclosure about a particular bank loan depending on the facts and circumstances.”
Work on this project began in January 2012, when the topic of the voluntary disclosure of bank loans was discussed at the Municipal Securities Rulemaking Board’s Industry Roundtable. The National Federation of Municipal Analysts agreed to play a coordinating role among various municipal market participants to reach consensus positions on the circumstances under which voluntary secondary market disclosure of bank loans should be considered, the form of such disclosure, the information that may be included and the time frame for making such disclosure.
The paper, entitled “Considerations Regarding Voluntary Secondary Market Disclosure About Bank Loans” is available here.
Rebuilding America’s School Act, H.R. 1629 Would Make Permanent QSCBs and QZABs
Rep. Charles Rangel (D-NY) has introduced legislation, the Rebuilding America’s School Act (H.R. 1629), that would make permanent qualified school construction and qualified zone academy bonds. Rep. Rangel introduced a similar bill in 2011.
“This Act will make permanent the Qualified School Construction Bond (QSCB) and Qualified Zone Academy Bond (QZAB) programs, which are two established, cost effective tax credit bond programs that provide federal financing for the construction, renovation, and repair of America's public schools. The QSCB program was established in the American Recovery and Reinvestment Act of 2009; the QZAB program was first authorized in 1997. The QZAB program was extended to 2013, when Rangel's bill was included in the passage of the American Taxpayer Relief Act of 2012.”
The text of the bill can be found here.
President Releases 2014 Budget
President Obama has released his FY 2014 budget proposals. The budget includes $1.8 trillion of deficit reduction proposals including $580 billion in additional revenue “from tax reform that closes tax loopholes and reduces tax benefits for those who need them least.” The budget proposals also include cuts to Medicare and changes to the inflation adjustment for spending programs and tax provisions. The President has explicitly linked the spending cuts and the tax increases in an effort to achieve the so-called “grand bargain” of deficit reduction. If such a bargain is to be achieved, it will probably come this summer as part of the negotiations to increase the debt limit. Click here to continue reading...
The U.S. Department of the Treasury has announced that it will close the SLGS window at 12:00 noon…