Kalotay Analytics participated in a Voltaire Advisors webinar on the latest issues and challenges in the muni markets. Andy Kalotay presented on Callable Taxable Munis Provide Hidden Value for Investors.
Advance refunding of tax-exempt munis with taxables accounted for about 25% of issuance in the first quarter of 2020. The call provision enables issuers to eventually replace taxable bonds with tax-exempts. We show that the ‘tax-exempt’ refunding feature can generate a surprising windfall for investors.
