Real estate-backed debt top performer in 2013: S&P

TRD New York /
Dec.December 26, 2013 10:05 AM

Debt tied to real estate development, also known as dirt bonds, is set to be the top performer in the $3.7 trillion state and local bond market in 2013, as the rebounding housing market ushers in greater investor returns.

Indeed, dirt bonds earned 1.1 percent through Dec. 23, while all municipal debt lost 2.6 percent, according to data from Standard & Poor’s. The housing market’s rebound following the longest recession since the Great Depression was the biggest driver of the strong performance, according to John Miller, co-head of fixed income at Chicago-based Nuveen Asset Management.

“These things all help the performance of the underlying credit fundamentals of land-secured bonds,” Miller told Bloomberg News. Land-backed debt is sold to help fund residential development construction and investors are repaid with assessment fees charged to homeowners, according to Bloomberg News.

The dirt bond market is still affected by a “taint” from the Florida housing market, Miller said, which has had the most new foreclosure filings in the country in 11 of the last 13 months, according to data from RealtyTrac seen by Bloomberg. [Bloomberg News]Hiten Samtani


Related Articles

arrow_forward_ios
Nationwide foreclosures are at a 15-year low (Credit: iStock)

Foreclosures nationwide fell to 15-year low in 2019

Seattle, Washington (Credit: iStock)

Good luck buying an affordable home in these US cities

Buyer sentiment was strong at the close of 2019 (Credit: iStock)

Home buyers start 2020 with drop in mortgage rates

Fort Lauderdale and Las Vegas were among the housing markets that saw the biggest changes in the last decade (Credit: iStock)

These were the craziest housing markets of the 2010s

In White Oaks, California, 72% of homes sold for over asking price between January and November, according to Redfin. (Credit: iStock)

Welcome to the most competitive housing markets in the US

Recreational vehicles (Credit: iStock)

What #vanlife says about a possible recession

Jerome Powell and New York City construction in October 2019 (Credit: Getty Images)

The Fed lowers rates, and once again real estate is loving it

Housing and Urban Development Secretary Ben Carson (Credit: Getty Images, iStock)

HUD wants to jumpstart bank lending on low-income homes

arrow_forward_ios
Loading...