Distressed Municipal Bond Strategy

The Principal Street Partners Distressed Municipal Bond Opportunity Strategy applies a distressed investment strategy in the municipal credit market. The objective of the strategy is long-term capital appreciation with a tax-free income component. The strategy primarily acquires bonds in smaller sizes or odd-lots to ensure the best pricing for limited partners, builds positions over time and sells when pricing has improved. The resulting portfolio is diversified across credits, geographies and types of municipal credit as well as uncorrelated to other asset classes.

We seek out the best opportunities based on upside potential and market misperception across sectors, including:

MULTI-FAMILY HOUSING
ECONOMIC DEVELOPMENT AUTHORITY BONDS
STUDENT HOUSING REVENUE BONDS
ASSISTED LIVING FACILITY REVENUE BONDS
HOSPITAL BONDS
GENERAL OBLIGATION BONDS/DISTRESSED MONOLINE INSURANCE COMPANIES

FOCUSED ON SPECIAL SITUATIONS, SMALL UNDISCOVERED BOND ISSUES

— Bonds purchased in the secondary market at broker auctions as opposed to the offering side to achieve the best possible prices
— Purchase investments at substantial discounts to the value the underlying assets would fetch in a worst-case scenario, such as liquidation or bankruptcy
— Invest in securities that are mispriced or otherwise dislocated

EXPERIENCED MUNICIPAL BOND TRADER AND ANALYST

— Manager has spent entire career in municipal bond market
— Manager has managed distressed municipal portfolio for last 15 years

DISTRESSED MUNICIPAL MARKET

— The municipal bond market is a $3.7 trillion dollar negotiated market
— The distressed municipal market is approximately $180 billion in size

NO LEVERAGE

— Unlevered return profile

TAX EFFICIENT

— A percentage of the returns generated are federally tax exempt due to the interest received from the tax-free bonds in the portfolio
— 1-3 year holding periods limits short-term capital gains

Stay Connected

For more information, please enter your contact information below and we’ll be in touch shortly.

David Weiner

Managing Partner

Eric Sellinger

Managing Partner

EQUITY INCOME STRATEGY: Q2 2021 COMMENTARY

Market Overview At the end of the second quarter over 54% of Americans had received at least one dose of the vaccine, although the pace of vaccinations slowed substantially. New cases and deaths fell to levels last seen in the early days of the Pandemic, but the U.S....

EQUITY INCOME STRATEGY: Q2 2021 COMMENTARY

Nov 19, 2021

Market Overview At the end of the second quarter over 54% of Americans had received at least one dose of the vaccine, although the pace of vaccinations slowed substantially. New cases and deaths fell to levels last seen in the early days of the Pandemic, but the U.S....