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July 11, 2019

Bloomberg: Craig Brothers Quoted in "California’s Fix for Utility Crisis Depends on Munis, Again"

"California’s Fix for Utility Crisis Depends on Munis, Again" by Romy Varghese and Danielle Moran, Bloomberg.

Craig Brothers, a senior portfolio manager at Bel Air Investment Advisors in Los Angeles, said the fact that the issuance is to cover wildfire costs may give investors pause. Fires are an annual occurrence, while East Coast governments have issued bonds after hurricanes, discrete natural disasters, he said.

Still, he said, any debt, particularly those issued now in California, could draw buyers with enough compensation. “If they give enough yield, that may cause people to overlook the flaws of the concept,” Brothers said. “They can probably tempt people to overlook strict credit analysis with yield.”

Read the full article here.