00:00What do we learn about what's happening here? Why is United pulling these issues?
00:04Yeah, so first of all, thank you so much for having me. And yeah, this week we saw that United was coming to the municipal bond market with an around $522 million deal.
00:13So the debt was issued by Houston, but on behalf of United Airlines.
00:17And those bonds were going to fund a variety of different projects at the airport as well as a refinancing.
00:23And so the debt was supposed to price on Tuesday. And we heard on Wednesday that only one portion of the deal got done.
00:29Ah, and these are high yield bonds as well. Did they try to market it and buyers just weren't interested at the prices they were being quoted?
00:35Yeah, so we saw that the refinancing portion of the deal got done. There was investor demand there.
00:41But United had to shelve the catering services facility and the ground services facility bonds.
00:47And so investors, I guess there was just not enough investor demand there.
00:51And United had said that market conditions was the reason that they shelved those portions of the deal.
00:55Okay, so these were bonds intended to fund certain projects. Are they still going to go forward with that even if the deal is shelved?
01:03Yes. United said to us that they're hoping to get these projects done by next year.
01:06And a few folks that we talked to had said the deal could come back next year as well in the bond market.
01:12But as Federal Reserve, if they cut the interest rates, that could lower borrowing costs and open up an opportunity for United to come back.
01:19And just put this into context for us overall. How are municipal bonds doing this year? Because in the first part of the year, they definitely struggled a bit.
01:26We have been seeing record amount of issuance in the muni sector. I mean, high yield airline bonds in the muni market have been outperforming the general index.
01:34And airport bond issuance overall has been skyrocketing this year. We've seen infrastructure projects around the country.
01:40It seems like every airport right now is going through a revamp. And so issuance on that side of the field has been really good and really strong.
01:48And we're expecting issuance to continue for the next year.
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