Tribal bonds fall off

Mark Fogarty, Today correspondent
7/2/10

NEW YORK – Chalk up another victim of the Great Recession – tribal bond finance.

Tribal bond issuance, after peaking at $577.6 million in 2007, has declined sharply since, according to data compiled by Thomson Reuters.

Volume fell by more than half in 2008, to $271.8 million, and by more than half again in 2009, to $77.2 million.

This year, to date, tribal governments have issued a tiny $2.8 million in bonds.

Before 2007, the biggest year for tribal government bonds was 2003, when $466.8 million were issued, according to Thomson Reuters.

Since 2001, tribes have issued about $2.7 billion in bonds, and a mere $4.6 million in notes.

While that represents an advance on previous decades, a look at state government issuance shows a glaring disparity.

State governments issued nearly $400 billion in bonds during the decade. That’s more than 150 times tribal government volume.

Tribes have used bonds to finance casinos and other economic development projects.

A provision in last year’s federal stimulus bill was designed to spark tribal bond issuance.

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