BDA adds Loop Capital to ranks

Chicago-based Loop Capital Markets is the latest to join the Bond Dealers of America, adding to the group's voice as it pushes to make headway on muni policy measures that have been stalled for years.

BDA announced the addition of Loop to its roster of more than 70 firms Wednesday, about two weeks after it also added another Chicago outfit to its ranks in Mesirow Financial. The additions come as the other major dealer group historically advocating for municipals appears to have pared back its muni focus, and as lawmakers hold hearings on infrastructure and other bills that could be of major importance to the market.

“The addition of Loop Capital makes the BDA a deeper, stronger and more effective trade association, tangibly benefiting all BDA member firms,” said Mike Nicholas, BDA’s CEO.

Loop, founded in 1997, has 26 offices and more than 175 employees around the country. It has been a part of more than $1 trillion of muni financings across 49 states, according to the firm.

BDA has sought to position itself as the leading muni market advocate on Capitol Hill after a reorganization at the Securities Industry and Financial Markets Association in which veteran muni researcher and lobbyist Michael Decker left at the end of February. Decker joined forces with BDA only a few weeks later, forming what BDA has termed “a working relationship.”

Though SIFMA has stated publicly that it continues to advocate for the muni market, and though the group continues to submit comments to federal regulators regarding muni rules, market participants have told The Bond Buyer that SIFMA’s priorities are driven primarily by the largest banks,for whom munis are only a small part of their business. Loop is also a SIFMA member.

BDA and other muni groups have their work cut out for them as federal lawmakers begin crafting legislation that could include provisions the market has sought, in some cases for many years. Topping many muni advocates’ wish lists is the reinstatement of advance refundings, which were eliminated by the 2017 Tax Cuts and Jobs Act.

Other priorities include lifting the cap on bank-qualified or small issuer bonds, which under current law can only be issued by municipalities that issue no more than $10 million of debt during the calendar year. The limit had briefly been $30 million during the Obama administration, and the market seeks a return to that level.

While either of those objectives and others, such as expanding the use of Private Activity Bonds, could be achieved by stand-alone legislation, some advocates think it more likely they could be included as part of a larger infrastructure package.

But there is also a persistent concern that the tax exemption for munis may be used as an offset for other spending. BDA and other groups generally say their mission is focused on preventing that from happening.