SYLLABUS

University of Chicago Harris School of Public Policy Studies

Special Topics: The Fundamentals of Municipal Bonds
PPHA 32530
Fridays 9:00am to 12:00pm
April 5th to June 7th
Harris School
Location:
104 B Harris
INSTRUCTOR:
Michael D. Belsky
mbelsky@uchicago.edu
312-953-5449

Course Goals & Purpose

This class will be oriented to graduate students interested in how
state and local governments as well as not for profit hospitals,
colleges and universities, and cultural institutions finance capital
projects including but not limited to: roads; bridges; mass transit,;
water sewer and electric systems; and public buildings, through
the issuance or sale of municipal bonds.
There are over $3.7 trillion in municipal bonds outstanding and on
average over $350 billion issued each year. This annual amount
represents 10,000 separate financings. This market is critical to

investors and the 87,500 state and local governments in the

United States that need to meet the needs of their respective
citizens. There are 55,000 governments with debt outstanding.
Each week we will cover different aspects of tax exempt bonds
and the various processes used to raise money for governments
and not for profits. The texts listed below will be supplemented by
rating agency reports, and topical articles from industry
publications and publicly available web sites. Some classes will
include guest speakers to illuminate a course subject and to point
up career opportunities.
The class will include a discussion how and where Masters
students in public policy can pursue various career options in the
municipal bond industry including: working in a: budget or finance
office of a government focusing on debt management; at a rating
agency; working as an analyst for a mutual fund, insurance
company or bank trust company; or working; or as an analyst for
an investment banking firm or government advisory firm. We will
also discuss how this entry level positions can lead to careers in
investment banking for government and portfolio management of
tax exempt bonds.

Exams, Grading, Etc.

In addition to weekly reading there will be a midterm and final.
The mid- term will be an exam with multiple choice and essay
questions. This will test your comprehension of the materials
covered to date.
The final will be a paper where you will write a rating agency
report on a given municipality. My hope is this will give you a work
product that will help you in obtaining employment should you
decide to choose the municipal bond industry as a career. Grading

will be based on a weighted average of attendance, class

participation, the midterm and final.
Grade Distribution:
10% Attendance
15% In-Class Participation and discussion
35% Midterm
40% Final Project
Grade Ranges:
A90-100
B.80-89
C70-79
D..60-69
F. <60

Attendance and Participation:

As the class is a once-weekly commitment, attendance is highly
important to your success in the class. Students will be graded for
the quality and quantity of their participation while attending
class. Exceptions may be given but only in advance.

Professor:
Adjunct Professor Michael Belsky has been in the municipal bond
industry for over 25 years. Mr. Belsky worked at Fitch Ratings for
15 years where he served as the Group Managing Director of the

Public Finance Group consisting of over 100 analysts in every

sector of municipal finance (e.g. utilities, cities, counties, states,
healthcare, and higher education); prior to that Mr. Belsky was an
investment banker and analyst at Mesirow Financial and The
Northern Trust Bank. Professor Belsky served as a City Councilman
in Highland Park, IL from 1995 to 2003 and as Mayor from 2003 to
2011. He also served as a member of the Governmental
Accounting Standards Board from 2008 to 2011. A national board
which sets accounting rules for State and Local Governments and
he continues to work in the municipal bond industry at New
Vernon wealth Management.

Required Texts:
Doty, Robert. Bloomberg Visual Guide to Municipal Bonds.
Bloomberg Press, Wiley 2012. Available from Amazon for Kindle, I
pad etc. or print.
Feldstein, Sylvan G.; Fabozzi, Frank J. The Handbook of
Municipal Bonds, Wiley, 2008.
OHara Neil. The Fundamentals of Municipal Bonds. Sixth
Edition, Wiley, 2012.
All of the above are from Amazon for Kindle, I pad etc. or print.
Other Reading: Selected articles and reports will be assigned as
well, as indicated below. These are included in your reading
folders. Additional articles and reports may be assigned and
discussed based on timely topics.
Guest Speakers: As indicated below I will be scheduling a
couple of guest speakers that are industry practitioners.

Week 1: 4/5

1. Lecture: Overview of the Municipal Bond Market

2. Required Readings:
a. OHara, Chapter 1
b. Doty, Chapter 1
c. MSRB, 2012. Fact Book(Do not read entirely, just
peruse the data section)
d. The Bond Buyer, 2012. 2012 in Statistics, Annual
Review(Do not read in entirety, just peruse
statistics)
Week 2: 4/12
1. Lecture: The Basics of Municipal Securities and Public Policy
2. Required Readings:
a. OHara, Chapter 2
b. Doty, Chapters 3, 4, 5
c. MSRB, 2012. Certain Types of Municipal Securities
d. Beth, Dougherty, 2012. Municipal Bonds:
Understanding the Fundamentals

Week 3: 4/19(Ivan Samstein, Chief Financial Officer, Cook

County)
1. Lecture: The Issuers
2. Required Readings:
a. OHara, Chapter 3
b. Feldstein, Fabozzi, Chapter 1
C. Murray, Steve, 2007. 12 Habits of Highly
Successful Finance Officers
d. Beglin, Julie, 2004. The Six Critical Components of
Strong Municipal Management
e.Prunty, Robin, 2010. Top 10 Management
Characteristics of Highly Rated Credits in U.S.
Public Finance

Week 4: 4/26(midterm distributed 4/29)

1. Lecture: The Primary and Secondary Market

2. Required Readings:
a. OHara, Chapters 4 & 5
b. Feldstein, Fabozzi, Chapters 2,3,4
c. Howard, J. Competitive and Negotiated Bond
Sales-Making The Right Choice
Week 5: 5/3 CFO Forum (class cancelled- make up class
5/24- see below)
1. Lecture: Bond Pricing and Investing
2. Required Readings:
a. OHara, Chapters 6 & 8
b. Doty, Chapters 7&8
c. Feldstein, Fabozzi, Chapter 14 and 39
d. MSRB, 2012. Understanding Municipal Market
Indices, Yield Curves and Benchmarks
e. Black Rock, Investing in Municipal Bonds
Week 6: 5/10
8:45 to 10:30 am. William Blair and Company, 222 W
Adams St, Chicago, IL. Investment Bankers, Phil Gutman,
Underwriting; Tom Greene; Trading; Dave Abel; Public
Finance.
10:45 am to 12:00 pm. Speer Financial, 1 North LaSalle
Street, Suite 4100, Chicago, IL. Financial Advisory Firm. Kevin
Mc Kanna, President, et.al
Week 7: 5/17
Lecture: Credit Analysis- General Obligation Bonds
1. Required Readings:
a. OHara, Chapter 7
b. Feldstein, Fabozzi , Chapter 11, 48
c. Doty, Chapter 3(Review)
d.) Laskey, Amy 2011, Tax Supported Rating Criteria

e) Hackett, Kate 2012, U.S. Local Government General

Obligation Methodology
e) Lerma, Alexandra, 2009. Local Government
National Medians
d. Perry, Eden, 2006. Debt Statement Analysis
Week 8: 5/23
1. Lecture: Credit Analysis Continued-Revenue Bonds
2. Required Readings:
a. Feldstein, Fabozzi, Chapter 59
b. Doty, Chapter 5
c. Scott, Doug 2012. Water and Sewer Revenue Bond
Rating Criteria
d. Chapman, Theodore 2008 Key Water and Sewer
Utility Credit Ratios
e. Oosterveld, Bart, 2005. The Role of Bond Covenants
in Municipal
Finance Credit Analysis

Week 8: 5/24(Craig Henderson, President CW Henderson

and Associates-tentative)
1. Lecture: Bond Pricing and Investing
2. Required Readings:
a) OHara, Chapters 6 & 8
b) Doty, Chapters 7&8
c) Feldstein, Fabozzi, Chapter 14 and 39
d) MSRB, 2012. Understanding Municipal Market
Indices, Yield Curves and Benchmarks
e) Black Rock, Investing in Municipal Bonds
Week 9: 5/31

1. Lecture: Regulation and Municipal Bond Law

2. Required Readings:
a. OHara, Chapter 9
b. Doty, Chapters 9&11
c. Feldstein, Fabozzi, Chapters 7, 34, 22,23
Week 10: 6/7 Group Rating Agency Presentations
Contemporary Issues Pensions, Bankruptcy, Tax
Exemption, and Career Opportunities (Will try to discuss
and assign some readings if time permits in each of the
classes above)
a. Cohen, Natalie, 2010. Public Pension Primer
b. De Jong, Kristen, 2011. Municipal Bankruptcy: A
Primer on Chapter9
c. Cohen, Natalie, 2011. Bankruptcy and Public
Pensions: Debunking Some Misconceptions
d. Cohen, Natalie, 2010. Unpacking the Headlines*
e. Schankel, Alan, Kozlick, 2012. The Threat to Tax
Exemption
f. Standish, 2012. Under Fire: Tax Exemption of
Municipal Bond Interest