Suzanne Mayes discusses the impacts the COVID-19 pandemic has had on the U.S. tax-exempt bond market. Suzanne credits the Federal Reserve for helping issuers across the U.S. through the creation of the Municipal Liquidity Facility (MLF). However, she notes that although the MLF was developed to restore creditor confidence in the bond market, a limited number of governmental entities have used the facility, “underscoring the parochial and idiosyncratic nature of what constitutes allowable borrowing for local governments across the United States.”
Despite learning curves and hurdles that arose with this new initiative, Suzanne notes that the MLF, a “new friend” to the industry, has benefits. According to Suzanne the industry needs to not only look at this new initiative, but also embrace “old friends” such as advance refundings to be successful. According to Suzanne, “If issuers and the communities they serve are to survive and thrive in the wake of unprecedented economic challenges, no one can afford to pick one set of friends over another.”
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