世界杯市政债券支出加速器：Kleinman

So your team published a report on this. Tell us about the different kinds of transportation and public infrastructure that money has helped finance across the 11 host cities. And this is infrastructure that's being used. Yes, during the World Cup. But whose benefits go far beyond that? That's absolutely right. And I think it's a great time to be here talking about this after that great win yesterday. So, uh, happy to be here.

So just taking a step back. You're right. The projects that municipalities financed with Muni bonds in advance of the World Cup were really part of a larger, comprehensive capital plan. So as investors, we see the World Cup as an accelerator for these projects that communities wanted to undertake and now had a real catalyst to do so. So some examples are if we look at Boston, the MBTA. So they built a new, larger platform outside of Gillette Stadium to accommodate all of the increased ridership that they're seeing to go to the games there.

Or if we turn to Seattle Sound Transit was able to complete a new, uh, rail extension over Lake Washington to connect the eastern suburbs with downtown Seattle, also benefiting visitors that will be attending those games. So you can see that these are not one off projects that will just be used for the World Cup and then will lay dormant or be vacant and never used again. These are projects that are well integrated into these city's capital plans and as investors.

This gives us a lot of comfort because we are really looking at the fiscal responsibility here. So you point out in your research that none of the host cities have had to take on significant new debt to finance brand new stadiums. Does it follow, then, that cities like Chicago, which declined to host the World Cup because it didn't want to deal with the financial costs, did they make the right decision, or did they miss out on an opportunity to upgrade their own infrastructure?

You know, the way that we look at it is that the host cities are really leveraging some federal funding that they've received in addition to muni bonds, in addition to some other funds to really upgrade infrastructure. So if you look at Houston, for example, that's a city where they have a great demand for international travel. They upgraded their airport, expanded the international terminal to be able to accommodate World Cup visitors, and also to accommodate international visitors into the future.

And so when we're looking at it, we're really seeing it not as a big sort of borrowing or, you know, debt boom, as you said, but really something that has been well integrated, well thought out and planned out by the host cities across the country. So do you think Chicago made the right decision here or the wrong decision? I think for Chicago. You know, I think that was a very individual, uh, decision for the city of Chicago.

But I think when we look across as investors, we feel really confident in the cities that did choose to host the World Cup and did choose to embark on these prudent capital projects, because I think it's indicative of the way that they are looking at their comprehensive capital plans and budgets. You mentioned that they can leverage federal funding. Um, what do we know about who got how much from the federal government, uh, in order to prepare for the World Cup?

Yeah. So the host cities received varying amounts of federal funding. There was some FEMA funding that was made available. There were some typical loans that were made available for, uh, for construction, but the federal funding really covered a small portion of the overall cost. And so cities were really looking to the muni bond market to fill some of those gaps in order to prepare for these large events. And these are tax exempt community bonds as well as taxable bonds, uh, mostly tax exempt muni bonds.

We did see, uh, in the case of the Houston airport issuing some uh, AMT bonds, but mostly tax exempt, uh, municipal bonds. So is this theme infrastructure upgrades tied to the World Cup, but not limited to it, funded by Muni bonds, tax exempt muni bonds, something that investors actively look to invest around. I'm curious whether this is something they came to Nuveen to ask you about. So, you know, when they were looking at the market, the cities are really looking at this again as part of sort of comprehensive capital planning.

They're not necessarily looking at it as World Cup projects, so to speak. I do think that given the popularity of the World Cup, given the attention of the World Cup, this is giving investors another lens to really look at these cities and to bring attention to the way that cities across the country are financing these critical infrastructure projects. So I think it's an interesting angle for investors to view the muni bond market.

How did the cities kind of build on this positive momentum? You know, I think that right now there are such positive feelings about the World Cup across the country. It's been so exciting to see the games. I think that as investors, when we see cities that are putting muni dollars, muni bond dollars to work in a prudent fashion when they are accessing the muni bond market via different security pledges like Jio pledges or dedicated sales tax pledges or hotel occupancy taxes.

I think this really gives investors an opportunity to see the breadth and depth of the bonds and the types of securities offered in the muni market.