Private placements, bank loans and lines of credit have ticked up in the last two weeks as issuers seek an alternative to a primary market that has all but shut down as markets reel from the COVID-19 pandemic.
New York’s Empire State Development Corporation privately placed $381 million of tax-exempt and taxable refunding state sales tax bonds with Bank of America Securities last week, the state comptroller’s office said.
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Even with the Federal Reserve’s essentially limitless line of purchases of various securities, including variable rate demand obligations and short-term municipal debt — adding to a list of assets eligible to be used as collateral by financial institutions — sources said the municipal new-issue market won’t reopen until there is good news from Washington on the legislative side.
Otherwise, the industry may see more issuers privately placing their debt.
(Read more: The Latest)
