Virgin Trains, American Dream-related bond trading levels eyed skeptically by muni experts
Summary: JR reviews trades of high yield bonds and finds something lacking.
Recent trades in Florida Development Finance Corporation (FDFC) bonds issued for the Virgin Trains USA Passenger Rail Project are “worrisome,” bond market veteran JR Rieger told Debtwire Municipals in an interview Tuesday [21 April]. “From my perspective, the trades we’re looking at for Florida Development 6.5s of 49 are worrisome for the municipal bond market in [regard] to its reputational risk,” said Rieger, owner of the Rieger Report LLC. “It appears that they are pre-arranged trades to support a certain price level.” Seeing consecutive multi-million-dollar blocks of bonds trade customer to customer at such tight spreads indicates to him that those bonds weren’t out for the bid but instead could be part of pre-arranged trades, Rieger said.
Date of publication: April 23, 2020