Courtesy of Mish.
Chicago finances are even worse than I thought which is saying quite a bit because I have written about the sorry state of Chicago finances on numerous occasion.
Kristi Culpepper, a bond guru, has gone over Chicago’s annual financial report, bond documents, investor presentations, and CAFRs. She has uncovered things the City of Chicago does not want anyone to understand.
For example, Culpepper reports Chicago general obligation bond deals have been used by the city as a means to avoid servicing short-term debt. Says Culpepper, “These bonds have received extraordinarily aggressive tax opinions . If the Internal Revenue Service ever gets around to scrutinizing them, your bonds probably won’t be tax exempt for long. Many of these uses of bond proceeds are not eligible for tax-exempt financing under the federal tax code.”
That is just the tip of the iceberg as to what Culpepper has discovered.
Who Is Kristi Culpepper?
Intrigued? You should be.
First let’s go over Culpepper’s background. Kristi Culpepper is a state government official with the Commonwealth of Kentucky. Among other things, she handles the structuring and sale of bonds for schools across the state. Previously, she worked for the Kentucky General Assembly analyzing state and local government bond issues and tracking the state’s capital construction programs. She has also worked at Merrill Lynch.
“Bond Girl”
Culpepper built up a huge following as “Bond Girl”. Bloomberg explains Twitter’s ‘Bond Girl’ Outs Herself as Kentucky Official.
Bond Girl, using the Twitter handle @munilass, had been posting commentary about state and city borrowing and issues beyond public finance since April 2011. Her sometimes-pointed posts attracted the attention of municipal-bond investors, bankers and analysts. Using her nom de Twitter, Culpepper sparred with other users, criticized public officials and vented about her life.
Culpepper “is regarded as an authority on capital projects and debt by the Legislative body,” according to a Kentucky Education Department website posted in November that announced her appointment. “She has worked with legislators, lobbyists, and attorneys to draft legislation and effect policy changes related to the state’s bonded indebtedness.”
Buyers and traders in the $3.7 trillion muni market had puzzled at the true identity of Bond Girl, Hector Negroni, co-founder of New York-based investing firm Fundamental Credit Opportunities, said in a telephone interview….
