S&P warns of ‘social’ risk to issuers

The “social” part of ESG evaluations poses the most downside risk to governmental and not-for-profit issuers in the Midwest and Central regions, S&P said. Analysts put an “elevated” risk label on its social scorecard, and “neutral” labels on environmental and governance factors in a report that looks at each category and specific issues that could be the most influential and material when analyzing borrowers’ credit worthiness. “We view the exposure to social risks as moderately negative within our credit rating analysis for rated entities in this region,” the report’s authors wrote.

And if you missed any of our ESG Week coverage, make sure to check our ESG special section which has all the articles, the podcast and a taped version of the Leaders event.

Florida state government revenues surged in fiscal 2021-22, bringing its total budget surplus to a record high of $21.8 billion, more than 21% above previous forecasts, as its economy continued to recover in the wake of the COVID-19 pandemic. In May, collections came in $742 million above estimates with preliminary data for June showing revenue running about $950 million above estimates.

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House Ways and Means Committee Chairman Richard Neal is seeking to turn up the dial on his housing agenda, reigniting discussions around what an expansion of the low-income housing tax credit may look like in the months leading up to crucial midterm elections. The credit was a major part of the discussion during the Ways and Means Committee hearing on Wednesday. Low-income housing tax credits are often used in conjunction with tax-exempt bonds to finance affordable housing.

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The Bond Buyer’s Rising Stars program’s return for a seventh year will include the inaugural inductions into The Bond Buyer Hall of Fame at an awards ceremony at the close of The Bond Buyer’s Infrastructure event November 15. Visit our website to make nominations in either category.

The Federal Reserve has aggressively ratcheted up interest rates to tame inflation. But that swift turnaround after more than a decade of accommodative monetary policy could create new risks to the financial system. “There can be consequences of quickly tightening monetary policy,” said Komal Sri-Kumar, a senior fellow at the Milken Institute and owner of his own macroeconomic consulting firm. “There could be a credit event that causes the Fed to throw every other principle out the window to protect financial stability.”

Municipals were little changed in secondary trading, as eyes turned toward the primary market's large revenue deals from the New York State Thruway Authority and the Colorado Health Facilities Authority. The 2/10 U.S. Treasury curve significantly inverted after the June consumer price index report came in hotter than expected at 9.1%, further stoking recession fears and leading some analysts to say a 100 basis point hike could be on the table. Equities ended in the red.