09/11/2014

Colorado School Bonds on Ballots

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This November, Colorado voters in 14 school districts will see a collective $1.4 billion in school bonds on their election ballots. If approved, Boulder Valley School District will lead the new issuance with $576.4 million, which will become the largest school district bond issue in Colorado’s history. Other notable bond proposals include Adams County School District 12 with $220 million, Brighton County School District 27J with $148 million, El Paso School District 49 with $107.4 million and Adams County School District 14 with $95.7 million.

The proposed issuance comes at a time when municipal bond supply has been limited. Through...

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09/03/2014

For Equity Growth, Rufenacht Seeks the Fiscally Responsible

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If the equity markets have had a nice run since 2009, it’s been even better for Aquila Three Peaks Opportunity Growth Fund. For the five-year period ending on June 30, the S&P 500 Index returned a cumulative 120% while Aquila Three Peaks Opportunity Growth Fund had a cumulative total return of 148% based on the public offering price. The annualized total return over the period placed the Fund in the top 21% of its Lipper Mid-Cap Core category. We recently spoke with the fund’s co-portfolio manager Sandy Rufenacht about fiscally responsible companies, how long the equity bull market...

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09/02/2014

Rhode Island ends Fiscal Year with a Surplus

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Governor Lincoln Chafee announced Friday, August 29 that Rhode Island ended fiscal year 2014 in June with a $68 million general fund surplus which was $8.7 million more than the General Assembly expected. According to a report from Rhode Island’s Department of Administration’s Office of Accounts and Control, general fund revenue expenditures were $16.1 million less than budgeted. The state also saw expenditures fall below budget by $18 million in 2011, $29 million in 2012 and $17.8 million in 2013.

The fiscal year 2014 preliminary closing statement showed that the state’s budget reserve and cash stabilization account is fully funded...

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08/04/2014

I’ve Loved This Work from the Start

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For our 30th anniversary series, Aquila Tax-Free Fund of Colorado and Aquila Tax-Free Trust of Oregon portfolio manager Chris Johns talks about persistence, the value of knowing your investors, and why he still finds the municipal bond market so fascinating.

 

You’ve been involved with Aquila Tax-Free Fund of Colorado since its inception, correct?

Yes. In 1985 the United Bank of Denver—the initial sub-adviser for the Fund—was approached by Aquila founder Lacy Herrmann about starting a state-specific municipal bond fund for Colorado. As the bank’s bond expert, I was assigned to the project. The proposal got as far as senior...

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07/15/2014

Island Hopping

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Continuing our 30th anniversary series, Aquila Regional Sales Manager Sherri Foster recalls the beginnings of Aquila, reveals what fund salespeople do, and explains why working in Hawaii isn’t what you think.

Your career with Aquila started with a chance meeting. What happened?

It was the summer of 1984 and I was a realtor in Lahaina, Maui. Lacy Herrmann (Aquila founder) and his wife Betsey wandered into my office. They were on a cruise and were walking through town. I showed them a condo, we talked, and they returned to their ship.

That winter I followed up with a phone call....

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07/11/2014

Municipal Bonds for America coalition – educating Congressional policy makers

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The Municipal Bonds for America (MBFA) coalition conducted a “Municipal Bonds 101” seminar on July 2, 2014 for an overflow crowd of US Congressional policy makers and staff.  The seminar is the second such event hosted by MBFA with the purpose of educating policy makers on the benefits provided by the municipal bond market and the problems associated with reducing or eliminating the tax exemption applicable to municipal bond income.  Panelists speaking during the seminar included Ron Bernardi, Principal, President and CEO, Bernardi Securities, Mayor Steve Benjamin, Columbia, South Carolina, and Kevin Burke, President and CEO, Airports Council International,...

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07/09/2014

Aquila Municipal Bond Funds Avoid Puerto Rico

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Each of the municipal bond funds offered in the Aquila Group of Funds adheres to an investment strategy focused on investment grade bonds as a means of managing credit risk, and an intermediate average portfolio maturity as a means of managing interest rate risk.  In keeping with our emphasis on high-quality holdings, the seven state-specific municipal bond funds offered by Aquila have no Puerto Rico holdings, whereas Morningstar has reported that roughly two-thirds of municipal bond funds hold Puerto Rico bonds.

The commonwealth of Puerto Rico has been grappling with budgetary issues which have generated a significant amount...

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06/27/2014

Long History of Local Investing

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Portfolio managers make the daily decisions that add up to the investment performance that investors see year after year. For our 30th anniversary series, we spoke to our longest-serving portfolio manager, Todd Curtis, who has managed the Aquila Tax-Free Trust of Arizona since its inception in 1986.

How did you begin working with Aquila?

Aquila had identified Valley National Bank, headquartered in Phoenix, as the sub-advisor for their Arizona fund. At the time, I was managing municipal bond investments at Valley National Bank, so I was the...

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06/20/2014

Finding a Home for Cash in the Municipal Bond Market

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Typically, during the months of June and July, a high volume of municipal bonds will mature or be called, leaving investors to roll those proceeds into other municipal bonds. This year, due to a recent decline in new municipal bond issuance, investors attempting to roll over maturing or called debt may be presented with some challenges.

In an effort to maintain balanced budgets, and during a period when voters have become more selective about approving new borrowing, states and municipalities have been issuing fewer new bonds. Based on data from Thomson Reuters through May 31st, year-to-date issuance has declined by...

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06/16/2014

Kentucky Hospital Bonds: Searching for Opportunity amid Turmoil

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During the third quarter of 2013, in an unsettled national municipal bond market environment, hospital bonds saw an increase in selling pressure precipitated by uncertainty surrounding the roll-out of the Affordable Care Act. During that same time period, the United States Department of Justice filed a lawsuit against King’s Daughters Medical Center in Ashland, Kentucky for purportedly submitting false claims to Medicare – bringing further scrutiny to the sector in the state of Kentucky. The hospital charged-off over $40 million in the third quarter due to the impending settlement, and national ratings services consequently downgraded approximately $240 million of...

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