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Belle Haven Investments CIO Invests in Sub-Advised Transamerica Funds
RYE BROOK, N.Y., Sept. 26, 2022 /PRNewswire/ -- Belle Haven Investments, a boutique fixed income manager with $15 billion under management, announced that Matt Dalton, CEO & CIO, has deployed additional personal investments into the Transamerica Intermediate Muni Fund (TIMUX) and the Transamerica High Yield Muni Fund (THYIX). Matt Dalton is currently one of the Portfolio Managers for each Fund. Mr. Dalton added capital to both Funds in February and May of 2022 as well.
"Buy when painful," is rhetoric that Matt Dalton often echoes.
Matt Dalton has worked exclusively in the fixed income asset class since 1985. He joined Belle Haven Investments in 1996 and assumed his current position as CEO & CIO in 2002, utilizing his years of experience in the institutional muni market to launch and guide the firm in the direction of investment management. As the lead portfolio manager for all of Belle Haven's strategies, Matt has helped the Firm earn recognition and awards from both Lipper and PSN Top Guns. Matt was named the top portfolio manager in the United States by Citywire for his management of the Transamerica Intermediate Muni Fund for the period of 9/30/2014 – 9/30/2019.
The Transamerica Intermediate Muni Fund is sub-advised by Belle Haven Investments and has over $1.7 Billion in AUM as of 8/31/2022. Matt Dalton, Cara Grealy and Max Christiana are the Portfolio Managers. The Fund is actively managed and seeks to maximize total return through a combination of current income that is exempt from federal income tax and capital appreciation.
The Transamerica High Yield Muni Fund is sub-advised by Belle Haven Investments and has over $150 Million in AUM as of 8/31/2022. Matt Dalton and Max Christiana are the Portfolio Managers. The Fund is actively managed and looks to identify inefficiencies in the municipal bond market with the goal of maximizing total return by investing primarily in medium-to-lower grade fixed income securities.
Belle Haven Investments is an independent, employee-owned money manager specializing in separately managed taxable and tax-exempt fixed income portfolios. The Firm also serves as a sub-adviser on the Transamerica Intermediate Muni Fund and the Transamerica High Yield Muni Fund. Belle Haven has been managing portfolios since 2002. The Firm is uniquely committed to serving Consultants and Advisors along with the Institutions, Foundations, Family Offices and High Net Worth individuals whom they represent. The team's expertise and focus in one asset class has resulted in award-winning strategies. Belle Haven is a Registered Investment Advisor with the Securities Exchange Commission (SEC). For more information, please visit www.bellehaven.com.
Disclaimer:
There may be less public information available on municipal fixed income securities than found on public corporations. Municipal bonds may be less liquid than corporate bonds. A portion of the income may be taxable by state or local taxing authorities. Municipal bond holders may also be subject to capital gains taxes and interest income may be subject to alternative minimum tax. Bonds are subject to credit, interest rate inflation risks. In addition, bonds incur ongoing fees and expenses.
An investment in a portfolio involves various risks, including the risk that an investor can lose money. While the Manager strives to attain the investment objective of the strategy through research and portfolio management skills, there is no guarantee of successful performance, that the objective can be reached or that a positive return can be achieved. Past performance is no guarantee of future results
Awards and recognition referenced in this material are produced by firms other than Belle Haven and may relate to strategies or managed products other than those featured in this piece. Criteria used to determine these awards may vary depending on the organization presenting the award; a list of such criteria can be obtained by emailing service@bellehaven.com.
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California Slow to Sell Housing Bonds as Homelessness Worsens
California Slow to Sell Housing Bonds as Homelessness Worsens
By Romy Varghese
April 21, 2022, 9:04 AM EDT Updated on April 21, 2022, 12:16 PM EDT
California’s efforts to alleviate homelessness through local borrowing are running up against the realities of slow-moving bond financing — and rising interest rates mean higher costs for the governments.
It’s been more than five years since voters in Alameda County, home to Oakland; Santa Clara County, the heart of Silicon Valley; and Los Angeles approved borrowing a total of $2.73 billion to tackle homelessness and boost affordable housing. Yet, less than half authorized in Los Angeles and Alameda County has been sold while Santa Clara County has cleared about 63% of its share.
To avoid racking up interest costs unnecessarily, localities sell bonds only when the projects are ready to spend money on construction and other expenses. The share of unsold bonds demonstrates how even if the funds are earmarked, many projects remain bogged down in obstacles such as zoning and still have a long way to go before the money can be spent. Meanwhile, bond yields have started to rise, meaning governments will have to pay more for the debt than they would have paid a couple years ago. Benchmark 10-year municipal bond yields are about 170 basis points higher than they were a year ago, according to Bloomberg indexes.
“Throwing money at the problem is not always the solution, and I think this perfectly illustrates that,” said Dora Lee, director of research at Belle Haven Investments. “It’s time to look at policy solutions in addition to funding solutions.”
The cost of housing and soaring inequality are deepening problems for California, home to the country's most expensive residential markets and 28% of unhoused people. The median home price has soared to almost $850,000 — more than twice the national level. Meanwhile, housing affordability and homelessness top the list of issues voters want the state to address, according to a poll released last week by the University of California, Berkeley’s Institute of Governmental Studies.
Municipal officials and housing developers say the bond measures alone were never meant to cure homelessness and housing crises. The voter-approved money is supposed to be paired with other government subsidies.
One such state funding resource has become competitive for the first time in years, and that’s delaying many projects. And those developments still have to overcome local resistance to multi-family residences in the state that’s the birthplace of single-family zoning and has fallen short of building enough homes for its population for years.
“People need to understand that the production of housing for extremely low-income households basically was non-existent for 10 years,” said Consuelo Hernandez, Santa Clara County’s office of supportive housing director. “So there’s a lot of catch up work that we have to do.”
In Los Angeles, Mayor Eric Garcetti has defended his city’s measure, Proposition HHH, as one that will house thousands of people ahead of its 10-year schedule. Still, only 14% of the projects have been built, and they are taking three to six years to complete, according to a February report by Controller Ron Galperin.
The city has $625 million of bonds left to sell from its $1.2 billion authorization and anticipates selling $351.7 million in the fiscal year beginning in July, according to the mayor’s office.
Alameda County, across the bay from San Francisco, plans to sell the remaining $340 million of its $580 million in June. Nearby Santa Clara County may sell some more bonds under its $950 million capacity next year.
While the local pledges provide an important boost, developers still must cobble together various federal and state funding streams. There is no central place in California to get state financing, for instance. And starting in 2019, developers' requests for private activity bonds, a key source of financing divvied up annually, totaled more than what the state was able to provide, delaying many projects.
“We made commitments to a whole bunch of projects that were ready to go after state funding. And then there wasn’t available state funding,” said Michelle Starratt, Alameda County housing director. “We were all competing for the same dollars against Los Angeles and San Francisco and everybody else. So we’re fighting for every little dime.”
If the financing sources could be narrowed down to a couple, “you would just see projects move much more quickly,” said Holly Benson, executive vice president and incoming president and chief executive officer of nonprofit developer Abode Communities. “But no, it’s not structured that way.”
Meanwhile, the pandemic pushed out timelines and raised costs. And the projects still had to overcome local resistance.
In one case, an affordable housing project in Livermore in the works for years that has a commitment of funding under Alameda County’s bond measure had to return its coveted state subsidies because a lawsuit from a group opposed to the low income limits for the homes delayed its ability to move forward. (A judge in February dismissed the suit, deeming the opponents’ claims “almost utterly without merit,” but an appeal is likely.)
But recent state legislation designed to fast track housing has helped. Dora Gallo, president and chief executive officer of nonprofit developer A Community of Friends, held up a project called West Terrace as an example of Los Angeles’s Proposition HHH working as it should.
The 64-unit affordable housing and permanent supportive housing venture was able to take advantage of a 2017 bill streamlining the approvals required for such projects and was in construction less than two years after the land purchase, she said. Construction will wrap up this year.
“There are a lot of success stories,” Gallo said. “I don’t want the public to lose faith.”
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https://www.bloomberg.com/news/articles/2022-04-21/as-california-homeless-crisis-worsens-bonds-remain-unspent?sref=dlv6Ue8o
Rising Rates Reduce Appeal of Taxable Bonds for Muni Issuers
Rising Rates Reduce Appeal of Taxable Bonds for Muni Issuers
By Shruti Singh and Danielle Moran
April 13, 2022, 2:01 PM EDT
States and localities are shying away from selling taxable bonds, a popular tool in the last two years, as rising interest rates reduce the chances for cost savings, especially from refinancing old debt.
Municipal issuers have sold $19.5 billion of long-term federally taxable bonds year to date, a 39% decrease from the same period a year ago, according to data compiled by Bloomberg. Sales of taxable munis surged in 2020 and the first half of 2021 to peak at almost a third of the primary market, before slowing to about 17% currently, according to Bloomberg data.
The Federal Reserve has begun to raise rates as part of a long-signaled plan to combat the highest inflation in four decades, and in doing so largely erased any savings governments could get from selling bonds to refinance outstanding debt. Taxable refunding bond sales have dropped almost 57% in 2022 from the year-ago period, and when tax-exempt refinancings are included, the decline is 33%, Bloomberg data show.
“Issuers are sensitive to interest rates and costs savings have evaporated,” said Matt Thomas, portfolio manager for Belle Haven Investments. “That takes a huge chunk of the supply out of the market.”
Kalamazoo, Michigan, for example, was planning to sell $76 million of taxable bonds to refinance debt in mid-March, but shelved the deal after rates jumped, said Warren Creamer, a managing director at Troy, Michigan-based MFCI LLC, an adviser on the proposed sale. The transaction is on hold as “the market continued to move away from us,” Creamer said.
“Rates have gone up to a point that the difference between the debt service on the old bonds and the new bonds isn’t enough to proceed with the transaction,” he said. “We were hoping that at some point we would start to see a new normal.”
Sales of all types of long-term municipal bonds this year are down about 6.4% to $113 billion. The yields for AAA muni securities maturing in 10 years on Wednesday reached the highest since March 2020, while 10-year Treasury rates hover around the highest since 2019.
An uptick in taxable sales to levels seen the last two years may be difficult without a sharp drop in interest rates, said Brian Barney, a managing director for Parametric Portfolio Associates. Compared with traditional tax-exempt municipal bonds, the taxable version offers higher yields to investors and can be used for projects ineligible for tax-free financing.
The segment will continue to play a significant role in the municipal market given investors looking for taxable income can tap into sales from muni issuers rated, on average, AA versus BBB corporate sellers, he said.
“It’s a big box in the muni market,” Barney said. “It still holds credence and I wouldn’t say this down tick in issuance pulls back the buying base.”
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https://www.bloomberg.com/news/articles/2022-04-13/rising-rates-reduce-appeal-of-taxable-bonds-for-muni-issuers?sref=dlv6Ue8o
Hybrid Work Poses Credit Risk to Cities Looking to Issue Debt
Hybrid Work Poses Credit Risk to Cities Looking to Issue Debt
By Skylar Woodhouse
April 8, 2022, 1:53 PM EDT
Remote working may be be a boon for many Americans. But it could lead to higher borrowing costs for some cities tapping the municipal-bond market.
Fitch Ratings, earlier this week, affirmed its negative rating of Kansas City, Missouri, flagging remote work as a credit risk. The city anticipates a slow recovery in earnings taxes -- which is its largest source of general fund revenue -- because of increased remote work, Fitch noted.
While cities have been receiving Federal aid to stay afloat, many could risk a downgrade if they burn through pandemic stimulus money without finding other means to fund deficits, Bloomberg Intelligence strategist Eric Kazatsky said in an interview. And those that face a downgrade may have to issue bonds with higher yields to compensate the increased credit risk. This makes it more expensive to issue bonds and makes refunding less optimal, said Eric Friedland, director of municipal research for Lord Abbett & Co.
Drivers of Downgrades
Remote work can impact a city’s revenue in multiple ways, from wage taxes that are levied depending on where workers put in their hours to the sales taxes that commuters pay at a local coffee shop on the way the office. Some states may require you to pay income taxes if you work there for just a day or two and for other states that might be 60 days.
A handful of cities in Ohio, such as Cincinnati, Toledo and Columbus, that rely heavily on income taxes could also see weakness in their revenue streams from remote working and potentially be subject to a downgrade, Kazatsky said.
Cincinnati, for example, derives 73.5% of its general fund revenue from income taxes, a Bloomberg Intelligence report published Thursday said. The average reliance on income taxes for municipal issuers is 8%, according to data from the Metropolitan Policy Program at the Brookings Institute.
Cities that have a greater dependence on commuter taxes are the most sensitive to work-from-home arrangements, Bloomberg Intelligence’s report said.
Richmond, Virginia, has the highest share of jobs held by workers commuting from outside the city at 77%, according to data from Pew Charitable Trusts. New York’s commuter share is 28% and Philadelphia’s is just under 50%.
While remote work won’t be the sole credit driver, it is a factor that ratings firms and investors are increasingly considering, said Dora Lee, director of research at Belle Haven Investments. Cities looking to issue debt must not dismiss remote work as a risk, especially as flexible work becomes a longer reality, said Tom Kozlik, head of municipal research and analytics at Hilltop Securities.
“The uncertainty is the most important thing, because this is a once in a generation type shift that we’re seeing and I think there are a lot of people who are down playing it,” he said.
Navigating the Risk
Large cities may be able to preempt a potential downgrade because their economy is often not focused on a single industry, Lee said. Such cities could use their diverse economy to reinvent themselves, she added. And their revenues could be fairly insulated because of the higher cost of living.
S&P Global Ratings revised their outlook for San Francisco to stable from negative on Thursday despite adding remote work as a risk. San Francisco-based firms have been asking for a reassessment of their property taxes as they’re increasingly adopting flexible work, which could put a dent in the city’s revenue. But the city’s “economically sensitive” revenue streams will be able to bounce back in the long term, credit analyst Chris Morgan said in the report.
“Maybe people are not doing full time in the office, but if the sales tax figures and hotel tax revenues are still rising because of some of the other factors like tourism, then it might not be that big of a deal,” Li Yang, a credit analyst with S&P Global Ratings, said in a phone interview. “We don’t necessarily need to see office workers go back 100%.”
Smaller towns outside larger cities could also see economic growth as hybrid work becomes more permanent, Lee said. With people not traveling to large cities for work as frequently as they were pre-pandemic, smaller suburban areas could see a boost to their economy.
President Joe Biden, governors and mayors have been pushing workers to return to their offices to help revive city economies. Local businesses that relied on workers going into the office could see some respite.
Workers who went to the office in 10 of the largest U.S. business districts rose to 42% of pre-Covid-19 levels in the week ended March 30, according to data from Kastle Systems.
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https://www.bloomberg.com/news/articles/2022-04-08/hybrid-work-poses-credit-risk-to-cities-looking-to-issue-debt?sref=dlv6Ue8o
Washington University Latest School to Sell $1 Billion in Munis
Washington University Latest School to Sell $1 Billion in Munis
By Nic Querolo
March 30, 2022 at 11:00 AM EDT
Washington University in St. Louis is planning to sell $1 billion in municipal bonds, joining a wave of schools tapping taxable debt amid a period of historic volatility and weak performance in the $4 trillion market.
The private university is looking to finance a slate of capital projects, including a neuroscience research facility and cancer center, offering investors one of the largest taxable deals on the calendar that’s expected to price this week, according to roadshow documents.
“If you have your focus on credit and you know how to maneuver the market well, there are definitely buying opportunities,” said Dora Lee, director of research at Belle Haven Investments. “Rewind to last year, everyone was looking for yield, and now yield is here.”
The Missouri university is the latest school to issue taxable debt this month, following similar deals by the Massachusetts Institute of Technology and University of Michigan.
The higher education sector was hit with credit downgrades early in the pandemic, and many colleges and universities have struggled to overcome pressures on enrollment, on-campus living and fluctuations in state budgets. This year will likely be the last to see significant budget relief from federal Covid stimulus, according to a Fitch Ratings report, and it could be a painful transition.
That said, enrollment declines were on average less severe at private colleges and universities, and top-choice schools were better insulated from wavering student interest, according to the Fitch report. Washington University accepted 13% of its applicants this year. Plus, it has seen full-time enrollment grow 12% since the 2017-18 school year despite a slight dip during the pandemic.
The deal stands to benefit from solid investor demand, garnering an Aa1 rating from Moody’s Investors Service, which cited a strong financial profile, leadership and an “excellent” brand.
The University of Michigan’s century bond -- the biggest ever sold by a college or university and part of a record $2 billion debt package -- was “well-oversubscribed” earlier this month, according Barclays Plc, the underwriter.
However, Washington University’s deal will likely price “slightly cheaper” given the difference in name, said Nisha Patel, a managing director at Parametric Portfolio Associates LLC. It will also issue the debt under a corporate CUSIP in a move that may give the school more flexibility in how it spends the proceeds.
“This is obviously not the typical structure that most muni buyers are looking for, especially all that duration in an environment where rising rates are a concern,” she said.
Washington University plans to use the funds to build a 620,000-square foot neuroscience facility with an 1,800-car garage, as well as an ambulatory cancer center that will be jointly owned with Barnes-Jewish hospital.
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https://www.bloomberg.com/markets/fixed-income?sref=dlv6Ue8o
Illinois Spreads Widen as Risk-Shy Investors Exploit Liquidity
Illinois Spreads Widen as Risk-Shy Investors Exploit Liquidity
By Shruti Singh
March 3, 2022, 1:53 PM EST
Illinois, the worst-rated U.S. state, is seeing its penalty in the bond market jump to the highest in nearly a year in the current risk-off environment.
The debt penalty for the state’s bonds over benchmark securities is at the highest since April. The rising spreads came as investors pulled about $8 billion from muni funds this year.
While Illinois’s credit outlook has improved, investors increasingly are showing a desire to raise cash and avoid risk in the $4 trillion municipal bond market, traditionally a credit haven, said Dan Solender, director of tax-free fixed income for Lord, Abbett & Co., which holds Illinois securities as part of $35 billion in muni debt.
“Illinois is an example of a large issuer with a lot of liquidity on the lower side of investment grade,” Solender said in an interview. “It kind of moves down faster at the beginning of a down market because it gets traded more actively.”
Illinois is underperforming the broader market. In February, the Illinois index fell 0.64%, the biggest decline among the largest state issuers in the Bloomberg Municipal Bond Index, which is down 3% this year. The Bloomberg Municipal Baa Index Total Return Index has fallen 3.5%.
Moody’s Investors Service upgraded the state to Baa2 from Baa3 in June, bringing it to two steps above junk. S&P Global Ratings lifted Illinois to BBB from BBB- in July, while Fitch Ratings raised its outlook to positive from negative, but kept it at BBB- given challenges including underfunded pensions.
The state’s 10-year bond spread on Feb. 25 reached about 106 basis points above AAA muni benchmark securities and is still hovering above 100 basis points. Those levels are the widest since April 2021, before Illinois’s first rating upgrade in two decades.
While the penalty is far less than the 4.4% in May 2020 during the early days of the pandemic, the increase is still a near-doubling from the low of 53 basis points in December. The difference in the penalty that Illinois pays over New Jersey, the second-lowest rated state, tripled to about 63 basis points this week from Dec. 1, when Illinois last sold bonds. New Jersey on Wednesday got its first ratings upgrade since 2005.
Carol Knowles, a spokesperson for the Governor’s Office of Management and Budget, said in a statement that the state doesn’t comment on day-to-day market fluctuations.
“When the muni market is hot, spreads compress, especially with the recent upgrade and positive outlook,” said Max Christiana, a portfolio manager for Belle Haven Investments, which holds $16 billion in muni assets including Illinois. “And then in a weak market, it tends to widen out quicker than other muni securities.”
The wider spread is due more to market technicals than the trajectory of Illinois as a credit, he said.
A rebounding economy has led the state’s revenue to top projections and federal stimulus money has eased strains caused by the Covid-19 pandemic. The state also has taken positive budgetary steps and its spreads still are tighter than in the past, said Molly Shellhorn, a senior research analyst for Nuveen, which holds about $1.4 billion in Illinois general-obligation debt as part of $230 billion in muni assets as of Dec. 31.
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https://www.bloomberg.com/news/articles/2022-03-03/illinois-spreads-widen-as-risk-shy-investors-exploit-liquidity?sref=dlv6Ue8o
Belle Haven Investments Awarded 4Q 2021 Top Guns Manager of the Decade Designations by Informa Financial Intelligence
Rye Brook, New York—February 18, 2022— Belle Haven Investments has been awarded with three PSN Top Guns Manager of the Decade distinctions by Informa Financial Intelligence’s PSN manager database, North America’s longest running database of investment managers. This is the third consecutive year that Taxable PLUS has been awarded Manager of the Decade in both the Core Fixed Income and US Fixed Income Universes. Taxable Ladder PLUS was awarded Manager of the Decade in the Core Fixed Income Universe for the second consecutive year.
“We are once again honored to have our two taxable strategies awarded Manager of the Decade by PSN” said Matt Dalton, CEO & CIO of Belle Haven Investments. “We will continue to stick to our disciplined approach that has allowed for this repeatable success.”
Belle Haven Investments’ Taxable PLUS and Taxable Ladder PLUS strategies were named Top Gun Manager of the Decade ratings, meaning these strategies had an r-squared of 0.80 or greater relative to the style benchmark for the latest 10-year period. Moreover, the strategy’s returns were greater than the style benchmark for the latest 10-year period and also standard deviation less than the style benchmark for the latest ten-year period. At this point, the top ten performers for the latest 10-year period become the PSN Top Guns Manager of the Decade.
Belle Haven Investments’ Taxable PLUS and Taxable Ladder PLUS are actively managed separate account strategies that invest in taxable municipal bonds, corporate bonds, agencies and treasuries.
The complete list of PSN Top Guns and an overview of the methodology can be located on https://psn.fi.informais.com/. For more details on the methodology behind the PSN Top Guns Rankings or to purchase PSN Top Guns Reports, contact Margaret Tobiasen at Margaret.tobiasen@informa.com
About BELLE HAVEN INVESTMENTS
Belle Haven Investments is an independent money manager specializing in separately managed taxable and tax-exempt portfolios. Belle Haven has been managing portfolios since 2002. The firm is uniquely committed to serving Consultants and Advisors along with the Institutions, Foundations, Family Offices and High Net Worth individuals whom they represent. The team's expertise and focus in the fixed income asset class has resulted in award-winning strategies. Belle Haven is a Registered Investment Advisor with the Securities Exchange Commission (SEC). For more information, please visit www.bellehaven.com
About Informa Financial Intelligence’s Zephyr
Financial Intelligence, part of the Informa Intelligence Division of Informa plc, is a leading provider of products and services helping financial institutions around the world cut through the noise and take decisive action. Informa Financial Intelligence's solutions provide unparalleled insight into market opportunity, competitive performance and customer segment behavioral patterns and performance through specialized industry research, intelligence, and insight. IFI’s Zephyr portfolio supports asset allocation, investment analysis, portfolio construction, and client communications that combine to help advisors and portfolio managers retain and grow client relationships. For more information about IFI, visit https://financialintelligence.informa.com. For more information about Zephyr’s PSN Separately Managed Accounts data, visit https://financialintelligence.informa.com/products-and-services/data-analysis-and-tools/psn-sma.
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https://www.prnewswire.com/news-releases/belle-haven-investments-awarded-4q-2021-top-guns-manager-of-the-decade-designations-by-informa-financial-intelligence-301487670.html?tc=eml_cleartime
Muni-Bond Buyers Join Commuters in Avoiding Public Transportation
Muni-Bond Buyers Join Commuters in Avoiding Public Transportation
By Romy Varghese
February 18, 2022, 11:12 AM EST
It’s not just rank and file commuters who are eschewing trains and buses -- so are municipal-bond buyers.
Barclays strategists Clare Pickering, Mayur Patel and Mikhail Foux advised clients to steer clear of bonds issued by public transit agencies, even as they touted some airport and toll road debt. That’s because of the systems’ weak ridership and the uncertainty of it reviving to pre-pandemic levels.
“Systems are even more dependent on federal support and significantly revived tax and fare collections to sustain operations and long term capital programs,” they said in a report Thursday.
The recommendation underscores the winners and losers of the pandemic trade. Even as some sectors such as airlines rebound from the depths of the initial Covid selloff in 2020, others remain under pressure. The embrace of remote work means less revenue for agencies as large as New York’s Metropolitan Transportation Authority and for those servicing less-populous areas.
“Smaller systems are also struggling,” said Dora Lee, director of research at Belle Haven Investments. She urged wariness of mass transit bonds without backstops such as a secondary pledge of special taxes. “It’s just that their shortfalls aren’t well in into the billions.”
While political leaders such as New York City Mayor Eric Adams exhort chief executives to bring bodies back behind desks, firms are facing labor shortages and the desire from their employees for flexibility. Less than a third of office workers were back in their buildings as of Feb. 9, according to an index of 10 of the largest U.S. business districts compiled by security company Kastle Systems.
In contrast, pent-up demand for travel and rising vaccination rates mean airports will fare better, S&P Global Ratings said in a report last month. The company expects U.S. enplanements returning to near pre-pandemic levels in the second quarter of 2023, but that mass transit will lag significantly. Its baseline scenario sees public ridership hitting only 75% of its previous volume by the end of 2024.
To be sure, the $69.5 billion in aid to transit systems from the federal government buys them time in avoiding a default. And if spreads widen enough, the Barclays strategists said that may even present a buying opportunity. But the aid will run out.
“Mass transit has always needed to rely on government funding to operate,” Lee said. “Once the infrastructure money runs out, they’ll have to figure out how to fill in the gaps again.”
— With assistance by Joseph Mysak Jr
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https://www.bloombergquint.com/business/muni-bond-buyers-join-commuters-in-eschewing-mass-transit