BondView’s innovation helps Municipal Bond Fund Managers and investors identify funds that could outperform their peers and avoid those with troubled holdings. According to Robert Kane, BondView’s CEO “BondView has leveled the playing field by integrating two previously independent mountains of data into one simple and affordable platform.” Kane also said, “Highly detailed information on the underlying holdings of municipal bond funds has been out of reach for many professional investors.”

BondView’s suite of applications allows:

-Real-time trading data on the holdings of more than 2,000 municipal bond funds
-Peer group evaluation tools to facilitate understanding the difference between a fund and members of its peer group at the holdings, income, liquidity and volatility levels.
-Stress testing, monitoring and other analytics on funds and individual holdings to uncover potential problems or highlight opportunities for outperformance.
-Alerts to fund portfolio changes and investment trends.
-Cross reference fund ownership with the entire universe of muni bonds.
-Institutional ownership on individual muni bonds.
-Detailed fund maturity schedule on all bond holdings and alerts for when new cash is available.
-Fund holdings overlap to compare and understand bond diversification and concentration across portfolios.

Access BondView’s Fund product free beta release, go to https://bondview.com/bond-funds

About BondView, Inc.
BondView offers comprehensive, real-time data on more than 2 million municipal bonds from over 50,000 issuers including estimated prices, alerts, ratings, financial filings, rich/cheap analysis, stress testing, trade history and more.
BondView accurately estimates bond values using real-time market data, proprietary pricing methodology and more than 10 years of raw trading data. It provides muni bond investors a simple yet powerful way to create, monitor and evaluate their muni-bond portfolios.

Dec. 16, 2015 12:03 PM ET|11 comments | Includes: CMU, CXE, HYD, HYMB, MAV, MHF, MHI, NMZ, SHYD, VBMFX
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…)
Summary

Municipal fund data show the so-called smart money currently have a strong appetite for junk-rated bonds despite the troubles surrounding Puerto Rico and pension shortfalls across the country.

Compared with like-rated corporate bonds, many “junk”-rated munis are diamonds in the rough. Thehistorical default rate in the municipal bond market is less than 1/3 of 1%.

Default does not mean bankruptcy in the municipal bond marketplace. Municipal bankruptcies are very rare.

The municipal bond market is a bazaar of nearly two million bond issues — totaling some $3.7 trillion. There are about 80,000 different types of bonds to chose from. Municipal fund data show the so-called smart money currently have a strong appetite for junk-rated bonds despite the troubles surrounding Puerto Rico and pension shortfalls across the country. It suggests fears over pension costs are probably overblown.

Municipal bond funds employ an army of managers and analysts to research each holding. Bearing in mind that funds have different investment objectives, from conservative to high yield, a vote of confidence from a broad swath of funds should carry a lot of weight with individual investors.

With that investment angel in mind, here’s a short list of the most widely held municipal bonds in mutual funds, based on both the number of funds owning these bonds and the total value of the bond holdings.

Most of these top 10 names are fine but curiously some are high yielding, the polite term for junk-rated and are in technical default. One Ohio Tobacco bond sports a yield as high as 6.3%. After tax this is almost a 10% yield. Yet a group of 67 different professional fund managers believe this bond is a good enough bet to have invested $631 million.

(Source: BondView.com)

The No. 1 Buy for Muni Bond Funds

Sometimes bonds may be mistakenly thrown into the junk pile just because they are not rated, such as the New York Liberty Development Corp. 3 World Trade Center Project Bonds with nearly a 5% yield. The 3 World Trade Center bonds are unique in that they were the municipal bond market’s largest unrated deal, Bloomberg reported. That means portfolio managers and analysts hopefully studied the nearly 2,700-page bond document without the help of the three major ratings agencies. While unrated bonds sometimes are equated with junk, that’s probably not the case here. The issuer may have assumed the marketplace appetite was solid enough that unnecessary ratings and the associated extra fees were not warranted.

The 3 World Trade Center bond is the most widely held muni bond among mutual funds. A total of 123 mutual funds own $889 million , as of early October 2015. Some of the biggest mutual funds invested in this bond as the table below shows.

(Source: BondView.com)

The 3 World Trade Center bonds, approved in Oct. 2014, were issued as part of the federal Liberty Bond program. The program was created to support the revival of Lower Manhattan with $8 billion of tax-exempt financing. The 3 World Trade Center are unique in that most commercial office developments are financed by bank loans — not tax-exempt bonds. It’s scheduled to be completed in 2018.

The bonds are secured by a mortgage on the 80-story building, tenant rents and leases. Anyone who has been to Manhattan in the last few years can tell you the real estate market is booming with low vacancy rates, high prices and record international tourism. The popularity of the 3 World Trade Center bonds suggests the smart-money has taken into consideration and is fairly comfortable with the risk of the developer failing to finish the project, among many others.

Muni Bond Fund Performance

(Source: Morningstar)

Of course, it all comes down to performance. As this table shows, high-yield muni funds have outperformed the rest of the bond market, as tracked by the Vanguard Total Bond Market Index Fund (MUTF:VBMFX), over the past one and five years. Some outperformed the index over the past 15 years while carrying a lower risk profile.

Bond Defaults Often Are Worked Out

Compared with like-rated corporate bonds, many “junk”-rated munis are diamonds in the rough. The historical default rate in the municipal bond market is less than 1/3 of 1%, compared to a corporate default rate that exceeds 10%, the Council of State Governments notes citing Fitch research.

Cities and states historically have raised taxes to make up for budget shortfalls. That said, Chicago is set to raise property taxes next year after Moody’s rated it below investment grade with a negative outlook because of pension issues. But public pension plans are not facing a crisis that the news headlines would lead you to believe, says the CSG. Writes the The CSG in a report:

Most state and local employee retirement systems have substantial assets to weather the economic crisis. There is currently $2.7 trillion already set aside in pension trusts for current and future retirees. Public pensions are funded and paid out over decades; state / local government retirees do not draw down their pensions all at once.

The CSG added:

More state and local governments enacted significant modifications to improve the long-term sustainability of their retirement plans in 2010 than in any other year in recent history.

Municipal bankruptcies are very rare. Only 0.06% of some 90,000 municipalities filed for bankruptcy between 1937 and 2008. That includes municipalities of all credit qualities including junk. The odds of a muni bankruptcy are “nearly in line with the odds of being struck by lightning,” writes Frank Holmes, CEO of U.S. Funds in San Antonio.

Default does not mean bankruptcy in the municipal bond marketplace. In many municipalities the jurisdictions have not successfully filed for bankruptcy on their debt / municipal bonds and have protected investors, including one of the largest in history – Orange County, Calif. in 1994,” according to the CSG.

The municipal bond market is a morass of nearly two million bond issues worth about $3.7 trillion in total. Investors have about 80,000 different issues to chose from. Data for municipal bond funds show the so-called smart money investors have big bets on junk-rated bonds despite the worries over Puerto Rico and pension deficits across the U.S. Perhaps fears over pension costs are overblown.

Municipal bond funds have an army of analysts and managers to perform due diligence on each holding. Although funds have different investment goals, from conservative to high yield, a vote of confidence from a wide array of funds should carry considerable weight with individual investors.

Given that investment angle, below is a list of the most widely owned municipal bonds in mutual funds. This table is based on both the number of funds with stakes in the bonds as well as the total value of the funds’ bond holdings.

Most of the top 10 municipal bonds in this list are fine. But curiously some are high yielding — the euphemism for junk-rated — and are in default technically. One Ohio Tobacco bond shows a yield as high as 6.3%. This is nearly a 10% yield after tax. Data show 67 different mutual fund managers must believe this bond is a sound investment given they have poured $631 million into it.

(Source: BondView.com)

The No. 1 Purchase for Muni Bond Funds

Municipal bonds sometimes may be thrown into the junk pile by mistake simply because they are not rated. For example: the New York Liberty Development Corp. 3 World Trade Center Project Bonds with nearly a 5% yield. The 3 World Trade Center bonds are very different because they were the municipal bond market’s largest unrated deal, Bloomberg reported.

Portfolio managers and analysts had to study the nearly 2,700-page bond document without the assistance of the three major credit ratings agencies. Unrated bonds sometimes are equated with junk. But that’s unlikely to be the case here. The issuer may have thought the bond market’s appetite was strong enough that getting rated and paying the associated fees were not necessary.

The 3 World Trade Center bond is the most widely-owned municipal bond among mutual funds. In total, 123 mutual funds own $889 million worth of the bond, as of early October 2015. Some of the largest mutual funds holding this bond are listed in the table below.

(Source: BondView.com)

Approved in Oct. 2014, the 3 World Trade Center bonds were issued as part of the federal Liberty Bond program. It was created to support Lower Manhattan’s resurgence with tax-exempt financing to the tune of $8 billion. Given that most commercial office developments are financed by bank loans — not tax-exempt bonds, the 3 World Trade Center’s financing makes it unique. The project is set for completion in 2018.

A mortgage on the 80-story building, tenant rents and leases secure the bonds. If you have been to Manhattan in the past few years, you saw thatl the real estate market is on fire with very low vacancy rates, sky-high prices and record international tourism. The mass appeal of the 3 World Trade Center bonds indicates the smart-money has considered and is fairly comfortable with the risks such as the developer failing to complete the project, among many other risks.

Muni Bond Fund Performance

(Source: Morningstar)

It all comes down to performance of course. High-yield muni funds have outpaced the rest of the bond market, as tracked by Vanguard Total Bond Market Index Fund (VMBFX), over the past one and five years, as the table shows. Some even beat the index over the past 15 years and had a lower risk profile.

Bond Defaults Are Worked Out Frequently

Many “junk”-rated munis are diamonds in the rough compared with like-rated corporate bonds. The Council of State Governments notes, citing Fitch research, that the historical default rate in the municipal bond market is less than 1/3 of 1%. The corporate default rate, on the other hand, tops 10%.

States and cities have historically increased taxes to make up for budget deficiencies. Chicago is raising property taxes next year after Moody’s gave it a below investment grade rating with a negative outlook owing to its pension issues. However, public pension plans do not have a crisis despite all of the news headlines, says the CSG.

“Most state and local employee retirement systems have substantial assets to weather the economic crisis,” The CSG stated in a report. “There is currently $2.7 trillion already set aside in pension trusts for current and future retirees. Public pensions are funded and paid out over decades; state / local government retirees do not draw down their pensions all at once.”

“More state and local governments enacted significant modifications to improve the long-term sustainability of their retirement plans in 2010 than in any other year in recent history,” the CSG added.

Municipal bankruptcies seldom occur. Only 0.06% of about 90,000 municipalities filed for bankruptcy from 1937 to 2008. This includes municipalities of all credit ratings including junk. The likelihood of a muni bankruptcy are “nearly in line with the odds of being struck by lightning,” says Frank Holmes, CEO of U.S. Funds in San Antonio.

In the municipal bond marketplace, default does not mean bankruptcy. In many cases bankrupted municipalities protected investors, including one of the largest in U.S. history – Orange County, Calif. in 1994, according to the CSG.

Robert Kane is the CEO of BondView, a provider of municipal bond data and analytics, in Roslyn Heights, N.Y.

© BondView

“We believe in arming financial professionals and individual investors with the same tools afforded to big investment firms. It is important that our methodology for estimating municipal bond prices is based on industry best practices and stands up exceptionally well in statistical testing,” explains BondView CEO Robert Kane. “We are leveling the playing field and filling an obvious need by focusing on financial professionals and retail investors,” said Kane.

Since its public launch in 2009, BondView has helped improve transparency while providing evaluated fair market pricing on millions of municipal bonds on a daily basis.

BondView is leveling the playing field for all investors by offering bulk data packages to those that need it. This includes financial and tax professionals, registered investment advisors and fund managers. Accountants engaged in estate planning routinely use BondView for “date of death” historical pricing data. Tax professionals require current and historical data for tax filing purposes.

BondView’s well-established reputation for accuracy and reliability has earned it the respect of entities in the public and private sector. Thousands of large financial institutions access BondView’s data monthly.

Additionally, all BondView subscribers benefit from BondView’s new unique service, Intelligent Bond Monitoring. This provides an early warning system to alert investors of important market changes. These include large price and yield swings, spikes in volume, liquidity and credit rating changes, and defaults. With Intelligent Bond Monitoring, financial advisors can be more proactive by being better informed. This will mean faster and better service for their clients.

Retail investors are now eligible to sign up for a 14-day free trial. BondView is available as a monthly subscription, with plans tailored to the needs of accounting and finance professionals. Each plan includes a baseline number of current and historical prices, along with a portfolio analysis and early warning monitoring.

About BondView:

We offer leading edge bond analysis and monitoring tools that are accurate, flexible and cost effective.

Media Contact:

Jim Walker
866-261-9533
Email

SOURCE BondView

Software developers rely on screen scraping to access free content that is published on financial web sites. Developers use tools to access various web sites to process large numbers of pages to copy or steal any information they want.

Defending against screen scraping is hard because to your web server, sophisticated screen scraping can look just your other traffic, i.e., a typical user on a web browser accessing your site. So what can you do about it?

Anti web scraping is a relatively new industry but the most common defense we hear revolves around IP address blocking.  The theory being if you can see suspicious network activity coming from a particular IP address, it could be a bot. So block the IP address right? Well that may work temporarily but professional scraping consultants are smart enough to bypass this minor hurdle by distributing bot traffic thru many IP addresses. So if you don’t want to start playing Whack A Mole on a global basis, you will need a better solution for web anti scraping.

What if the bot traffic you block is traveling thru an IP address from a large cable provider’s ISP shared by many other users.  You might accidentally block legitimate users.  If you aren’t handling this problem internally, then maybe you’ve purchased a Web Application Firewall or DDoS based solution.  What do these solutions do to control bots that are trying to scrape, copy and steal your data?  Not enough and often its based on simple rate-limiting.  Many sophisticated bots are designed to emulate human characteristics and therefore wont be identified or stopped using IP address rate limiting. In addition, smart scrapers routinely rotate through 100’s or even 1,000’s of IP addresses. For example, a leading hosted scraping product offers low cost “anonymous browsing” for scripts and can rotate thru 1500 IP addresses.

But what if you could automatically identify and block unauthorized bot activity thru multiple IP addresses simply by using a cloud based software product? Scrapedefender tracks all your web traffic and identifies patterns using intrusion detection techniques to categorize user traffic using many different behavioral metrics. People have unique biometric characteristics such as fingerprints. Computers, internet browser characteristics and geo location can be combined to uniquely identity and block scraping.  Extensive research has been published to document the fact that a computer, and the software its running, can be remotely digitally fingerprinted. No matter how many IP addresses suspicious bot activity gets distributed across, when they hit your domain, they can be identified and blocked.

Scrape Defender relies on many different usage metrics to perform web anti scraping and its working great for Bondview.

There are no easy answers to stopping screen scraping, but it is a challenge that most financial web sites may have to deal with. The team of web anti scraping experts at ScrapeDefender helped Bondview plenty. If there was a gold medal for best anti scraping product, ScrapeDefedner would win.

Bass sees Puerto Rico has huge pension liabilities, is mired in a population decline and pays no federal income tax. Yet they remain a destination for billions of dollars of U.S. taxpayer and investor cash each year.

Here is a real time list of Puerto Rico bonds that are available at fire sale prices, defined as trading at half or less than of par value, in relatively high volume (at least five trades per day) at prices between $0 and $50.

“You look at their finances and you say ‘I have no clue how this can exist for very much longer,’” Bass said. He noted that Moody’s downgraded Puerto Rico just under a year ago to barely above junk status, when Puerto Rico’s borrowing rates were about half what they are now, but that Moody’s recently reaffirmed those ratings rather than cutting them further to junk. “Clearly they are completely junk,” Bass said.

Bass even compared Puerto Rico to Greece in 2009 or 2010, saying any municipality or sovereign entity is “typically asset-heavy, but how many times have you seen a sovereign entity cede their sovereignty, sell an asset to pay an external creditor? Doesn’t happen.”

Moody’s downgraded Puerto Rico debt just under a year ago to a level just above junk status, since then Puerto Rico’s borrowing rates have nearly doubled. But Moody’s recently reaffirmed those ratings rather than cutting them further. “Clearly they are completely junk,” Bass said. –

Here is a real time list of Detroit’s defaulted bonds and where they are trading.

The filing by the automobile capital and onetime music powerhouse – which has liabilities of more than $18 billion – is the country’s largest-ever municipal bankruptcy case. The move is bound to set off months, if not years, of legal wrangling, asset sales and cuts to benefits for Detroit workers and retirees, including 20,000 on city pensions. Owners of the city’s bonds are expected to battle with retirees and others for pieces of the city’s diminished wealth.

So it has begun.

Bondview surveyed several well respected advisors and the majority say they have lengthened duration while moving to the buy side. They are are buying where we they can and altering accounts and mixes of accounts. One advisor said “bargains abound – you can get ny paper 4% 15 yrs and 5% out longer – national paper is cheaper. Another said “They say they are “are taking advantage of this very opportunistic time.”

Good Luck To All,
Bondview

Here is a real time list of California’s largest defaulted municipal bonds. Adds up to billions.

Klein sided with the city, and perhaps now municipalities face a disturbingly low bar for pursuing bankruptcy. They will be emboldened to choose Stockton’s course—i.e., using bankruptcy as a strategic policy tool to dump debts without having to confront the main reasons that they went bankrupt in the first place, such as fat pensions. Bankruptcy will no longer be a policy of last resort. This should have an impact on bond markets but probably wont any time soon. Stockton’s defautled bonds are already in the toilet although some of their bonds are trading close to par.

Granted, no one should feel too sorry for the lenders (and their insurers) who provided the pension-obligation bonds to the city. They knew the risks when one lends money to a city—especially one controlled by the unions. But their argument is strongest. A city shouldn’t use bankruptcy as a means to get rid of uncomfortable debts. It should use this tool only when it has slashed its costs but still can’t get out from under the load.

As the attorney for the bond insurer noted in his closing comments on Wednesday, the city intended, from the outset of this process, to shortchange the bond holders. It has refused to address its biggest debt—the payments that it owes to CalPERS to pay for its pension obligations. It only modestly pulled back compensation from rates far above the market to somewhere near the average for public-sector workers in California.

Essentially, the city plan has put pension debt off the table, arguing that pension payments and benefits cannot legally be touched. A bankruptcy would be the place to challenge that assumption, but Stockton officials have no interest in doing so, figuring it’s easier to go after Wall Street than the unions. If Stockton gets its way, then cities can spend anything on pensions and there is no way to ever get out from under that debt.

Some of the most telling testimony came Wednesday morning, when bond-insurer Assured Guaranty’s attorney Guy Neal questioned city councilmember Kathy Miller about a July 2012 video that explained the fiscal situation to city residents. Here are some of her statements from the video:

In the 1990s, Stockton granted its employees some of the most generous and unsustainable labor contracts in the State of California.… Safety employees could now retire at the age of 50.… Many safety retirees today earn 90 to 100 percent of what they made when they were still on the job.

That’s common. But Miller noted that:

Stockton went even further than most other cities and granted things like unlimited vacation and sick time that could be cashed out when an employee retired, and added pay categories for almost everything imaginable.… Our public safety employees were costing us on average more than $150,000 a year each. That’s three times more than most of us in Stockton make in a year.

She described the “Lamborghini” health plan the city’s employees received:

This was free medical care for a retiree and a dependent for the rest of their lives. No co-pays, no generic requirements, no HMOs, and no premiums. See any doctor, stay in any hospital, purchase any drug, and just send the bill to the city of Stockton.

Absurd pay and benefits are common, and not just in Stockton. San Francisco Chronicle columnists Matier and Ross revealed recently that the Alameda County executive receives a $423,000 a year pay package for life. Compensation for California firefighters is in the $175,000 a year range. Some Newport Beach lifeguards receive $200,000 a year pay packages. As a friend of mine joked, revolutions have been fought over lesser instances of public pilfering.

Stockton pulled back on some abuses, but has left the main problem in place. Why is it OK that Stockton residents have to put up with closed parks, reduced policing and other cutbacks to protect outrageous pension and pay levels?

Currently, Stockton leaders are floating a tax increase plan to fund police officers. But money is fungible so this should be viewed as a tax designed to pay for past boondoggles. Whatever the court decides, it’s time for the public to stand up to these misshapen priorities.

Next is Puerto Rico, as their Government Development Bank announced a series of measures designed to help reform and bolster their underfunded employee retirement system. Here is a list of defaulted Puerto Rico bonds. Although Moody’s downgraded Puerto Rico general obligation bonds in December 2012 and more recent market action has resulted in price decreases since mid-January. Puerto Rico remains on credit watch negative from Standard & Poor’s and Fitch. Puerto Rico will be coming to market in Q2 2013 with new issues that will re-set the bar for existing Puerto Rico bonds. For anyone owning Puerto Rico bonds, this new issue will be worth watching. The media is reporting that Puerto Rico is marketing itself as a legal tax haven to US residents since there is no Federal income tax on residents