I investigate the trade-off between capital market incentives, reputational concerns, and administrative costs in the public disclosure decisions of municipal bond issuers. After Ambac's bankruptcy, issuers of insured debt increase disclosure relative to issuers of uninsured debt. After local...

In the past, assessment of the reasonableness of municipal bond markups depended on anecdotal recollection of markups and subjective judgment about what was customary. Interested parties including regulators can now use the MSRB's EMMA service to determine the markups charged on a set of...

Bond insurance was a small but sophisticated sector of the broader insurance industry. Conceived and created in the 1970s, bond insurance penetrated more than half of the entire US municipal bond market in the 1990s. This article explains bond insurance, its rise to prominence, and its sudden...

This study examines how familiarities between the main actors in the underwriting process affected the borrowing costs of municipal bonds in the primary market in California between 2001 and 2006. The author finds that familiarities play an important role in determining the borrowing costs of...

We examine the impact of population aging on municipal access to credit. A one standard deviation increase in a state's population age leads to a 23 basis point increase in municipal bond issue spread. Three mechanisms drive this effect: income tax revenue, healthcare liabilities, and pension...

We examine the benefits of bond insurance to taxpayers using comprehensive data over three decades. We employ multiple modelling approaches to account for the selection into insurance parametrically and non-parametrically. Controlling for fundamentals and the choice to insure, insurers with Aaa...

We analyze the extent to which investors in opaque markets price information from more transparent markets. Exploiting the natural experiment created by bond-insurer insolvency, we show that municipal bond investors ignore insurers' equity prices and CDS premia, yet react to insurers'...

Lack of competition among the underwriters of municipal bonds increases the borrowing costs of local municipalities. I find that the proportion of municipal bonds sold in competitive sales in the state has an economically significant effect on several measures of competitiveness. Competitive...

Build America Bonds (BABs) are a new form of municipal financing introduced in 2009. Investors in BAB municipal bonds receive interest payments that are taxable, but issuers receive a subsidy from the U.S. Treasury. The BAB program has succeeded in lowering the cost of funding for state and...

Pension data for local governments are generally unavailable. Hence, prior re­search has relied on pension ratios as proxies for underfunding. In this paper, we utilize data from Pennsylvania where local governments are required to report unfunded obligations on an actuarial basis to a state...