00:00So your team published a report on this. Tell us about the different kinds of transportation
00:04and public infrastructure that munis helped finance across the 11 host cities. And this
00:09is infrastructure that's being used, yes, during the World Cup, but whose benefits go far beyond
00:13that. That's absolutely right. And I think it's a great time to be here talking about this after
00:18that great win yesterday. So happy to be here. So just taking a step back, you're right. The
00:24projects that municipalities financed with muni bonds in advance of the World Cup were really
00:30part of a larger comprehensive capital plan. So as investors, we see the World Cup as an
00:36accelerator for these projects that communities wanted to undertake and now had a real catalyst
00:43to do so. So some examples are if we look at Boston, the MBTA. So they built a new larger
00:50platform outside of Gillette Stadium to accommodate all of the increased ridership that they're
00:56seeing to go to the games there. Or if we turn to Seattle, Sound Transit was able to complete
01:01a new rail extension over Lake Washington to connect the eastern suburbs with downtown Seattle,
01:09also benefiting visitors that will be attending those games. So you can see that these are not
01:14one off projects that will just be used for the World Cup and then will lay dormant or be
01:18vacant and never used again. These are projects that are well integrated into these cities capital
01:23plans. And as investors, this gives us a lot of comfort because we are really looking at
01:28the fiscal responsibility here. So you point out in your research that none of the host cities
01:32have had to take on significant new debt to finance brand new stadiums. Does it follow then
01:38that cities like Chicago, which declined to host the World Cup because it didn't want to deal
01:43with the financial costs, did they make the right decision or did they miss out on an opportunity
01:47to upgrade their own infrastructure? You know, the way that we look at it is that the host cities
01:51are really leveraging some federal funding that they've received in addition to muni bonds,
01:57in addition to some other funds to really upgrade infrastructure. So if you look at Houston,
02:02for example, that's a city where they have a great demand for international travel. They upgraded
02:08their airport, expanded the international terminal to be able to accommodate World Cup visitors
02:12and also to accommodate international visitors into the future. And so when we're looking at it,
02:18we're really seeing it not as a big sort of borrowing or, you know, debt boom, as you said,
02:24but really something that has been well integrated, well thought out and planned out by the host cities
02:30across the country.
02:31So do you think Chicago made the right decision here or the wrong decision?
02:35I think for Chicago, you know, I think that was a very individual decision for the city of Chicago.
02:41But I think when we look across as investors, we feel really confident in the cities that did choose
02:47to host the World Cup and did choose to embark on these prudent capital projects, because I think
02:52it's indicative of the way that they are looking at their comprehensive capital plans and budgets.
02:58You mentioned that they can leverage federal funding. What do we know about who got how much
03:03from the federal government in order to prepare for the World Cup?
03:07Yeah, so the host cities received varying amounts of federal funding. There was some FEMA funding that
03:13was made available. There were some TIFIA loans that were made available for construction. But the
03:19federal funding really covered a small portion of the overall cost. And so cities were really looking
03:25to the muni bond market to fill some of those gaps in order to prepare for these large events.
03:32And these are tax-exempt muni bonds as well as taxable muni bonds?
03:35Mostly tax-exempt muni bonds. We did see, in the case of the Houston airport, issuing some AMT bonds,
03:42but mostly tax-exempt municipal bonds.
03:46So is this theme, infrastructure upgrades tied to the World Cup but not limited to it,
03:51funded by muni bonds, tax-exempt muni bonds, something that investors actively look to invest
03:57around? I'm curious whether this is something they came to Naveen to ask you about.
04:01So, you know, when they were looking at the market, the cities are really looking at this,
04:07again, as part of sort of comprehensive capital planning. They're not necessarily looking at it
04:12as World Cup projects, so to speak. I do think that given the popularity of the World Cup, given the
04:17attention of the World Cup, this is giving investors another lens to really look at these cities and to
04:22bring attention to the way that cities across the country are financing these critical infrastructure
04:28projects. So I think it's an interesting angle for investors to view the muni bond market.
04:35How do the cities kind of build on this positive momentum?
04:38You know, I think that right now, there's such positive feelings about the World Cup across the
04:44country. It's been so exciting to see the games. I think that as investors, when we see cities that
04:50are putting muni bond dollars to work in a prudent fashion, when they are accessing the muni bond
04:57market via different security pledges like geo pledges or dedicated sales tax pledges or hotel
05:04occupancy taxes, I think this really gives investors an opportunity to see the breadth and depth of the
05:11bonds and the types of securities offered in the muni market.
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