- We have been discussing Charter Schools for quite some time regarding the credit quality of the underlying. Bondholders who own MUNI debt sold for a TX charter school did not receive their October coupon payment after the school closed its doors. Reve Preparatory Inc., which operates the school in the South Houston area, has approximately $25 million of bonds outstanding. We are suspect of this credit, although we do have bonds out on a few charter schools, they are all insured by the two top insurance companies. If you are purchasing this debt, it is recommended that you consult with your team, which handles your MUNIs, to confirm that you own the correct credits.
- Investors continue to add funds to MUNI bond mutual funds, adding $1.11 billion in the week ended September 24. The week prior saw a $ 1.14 billion inflow. This is indicative of the “rate trade” we are seeing now. As we have discussed at great length, both in our outbound communications and on our webinar last month, rates are expected to continue declining as we approach the end of 2025.
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