and there is a better table in the bond report. >> okay. we just got that this morning. >> it's laid out there well, but we're happy to -- >> no, that might do it for sure. and the next page, the middle income housing. you have small sites but i didn't see any budget for small sites in middle income housing, should that be under low income? >> yes. that was a mistake. we just noticed that. small sites is in the low income category. the reason we accidentally put it into middle income is unlike the other low income developments that cap occupancy at households earning just 60%, the small sites program can go up to 120% of median income, it serves a much broader purpose and can serve many more households. the buildings that nonprofit partners have bought tend to serve low income people. but thank you, that's a correction. >> and one more question that could be in the bond report, but taking the money from 4840 mission and 250 laguna and putting it in 88 broadway, will that keep the number of units generated equal, less than or more than what

this is a bond component that is under their

the bond. additional financing sources for the project include a $4.5 million private donation from the san francisco citizens initiative for technology and innovation, and award from the federal home loan bank affordable housing program, a loan from ocii, and a $10 million award from the california department of housing and community developments, veterans housing and homelessness prevention program. and this is the first san francisco project to be awarded funds through the program. the board's approval of this bond issuance will keep us on practice for the close of construction financing and construction start in bid december, and this project will be complete and ready for of course wan si in fall of 2019. that concludes my staff presentation. i am happy to answer any questions you have. a representative from ccdc is here as well and available to answer your questions. thank you. >> supervisor cohen: thank you very much. we'll open up for public comment on item three. come on up. seeing non

as the commission the d bonds are taxable and that's the refunding of five outstanding bonds, the 2017e bonds are tax exempt and it's refunding two outstanding bonds and for 2017d the par amount of the ponds will be $118 million and noted before refunds five outstanding bonds and the credit is what we call the rpttf credit which is the one that allows us to refinance multiple project areas with a single bond and this credit was created by the commission in 2014 and these bonds are issued on a parity with the 2014b and c bonds and the rating i'm happy to say is double a minus for these bonds and it's an upgrade that was just received and broadcast today i believe, yesterday or today, it was a plus before and now it's double a minus which is very strong and the reasons for this are continued growth and assessed value primarily as well as the fact that these credits and the credit senior to this are closed except for refunding so no new bonds can be issued against it in the meantime the revenues are greg that makes it stronger and stronger. double a again this is a rpttf credit is sub or d

not high but it is a government bond. there is even some interesting portugal bonds in dollars.ying with euro land, it is different from the u.s. high-yield. it is a much higher rated market. it is a double b market. there is a natural difference. we are investing cocoas. subordinated financial credit. it has also performed well, but there is still a premium. then, just very selective. over here we have an interesting hybrid market. for example, one of the issues we have in the portfolio we disclosed would be volkswagen 10-year subordinated debt. that yields circa 3%, not super high-yield, but in the context of where bunds are and where cash is, selective value. jonathan: alan, quickly, cocoas have had a great year already. would you continue to buy cocoas from here? what are you looking in them, the yield you get on them? are you looking for more capital returns on the back of them? where is the upside? what you looking for to get from that specific trade? alan: it is more income, a tremendous rally. short dated cocoas are falling to very low yields. essentially, you are still

bonds that sold in december. i won't go through it for the sake of time, but a few items that we need to cover. in september, you were presented with a capital financing plan for fiscal year 2018 that listed the transactions that you see on this slide. this transaction was the first of the transactions. so we are keeping to what we planned in the capital financing plan, moving forward with this item. brief description of the transaction, the bonds consist of three sub series. last time bonds were funded for wsup, 2016. b, regional and local water projects. and sub series c, hechi. it will be sold and not to exceed $400 million in a competitive sale. they're tax-exempt, pretty standard, pretty conventional. i would like to note that sub series a will be designated as green bonds. we plan it use some of the bond proceeds to refund water commercial pay outstanding. we won't need to go to the board again for this and i would like to confirm that these bonds are being issued in compliance and accordance with debt mana

we can't know everything and these are complex bonds. my suggestion to the chair, in the january 22nd meeting, we quickly revisit this to make sure robert has the updated financials and everything he feels comfortable with prior to the bond sale. from our perspective, all we can do is stop the bond sale. we need to make sure this body feels comfortable moving forward and i don't know if the procurement issues are relevant here, but that would be great to do between now and the 22nd of january. my other comments were, you said at one point it was wise approach to plan these things ahead of time -- >> i'm sorry what? >> you were talking about the -- one of your -- the chief medical examiner building and said we planned it ahead of time and were able to move faster. that is a wise approach, we agree. and we're working with a lot of other bonds to hopefully take that approach. the other thing i wanted to say, it can be hard to read these with a lot of acronyms in them. if you could spell things out a bit, it would be helpful. >> we'll improv

these are among the risk is bonds.then, it is giving you less than 6% back for your risky bets. so where do you chase it? jeffrey: this is one of the legacies of our quantitative easing and why it really does have to finish up and be moved, consigned, to the halls of history. so much extortion around the world. in times past, quantitative easing meant banks covered up every single bond in the world. it is pushing investors with a liquidity and risks like junk bonds. you buy a lot of junk bonds and then the yields go down. this is what we are seeing and it is causing distortions everywhere. the federal reserve and ecb are looking to unwind at the moment. we are seeing some slow on the junk bond side. the high-yield decide, some issues in the last few weeks. the high-yield index has creeping -- been creeping higher lately. tracy: the end of an era, zimbabwe loses the only dealer it has ever known as mugabe finally resigns. this is bloomberg. ♪ ♪ tracy: welcome back, you are watching the "best of bloomberg markets: middle

not high but it is a government bond. there is even some interesting portugal bonds in dollars.ying with europe, it is different from the u.s. high-yield. it is a much higher rated market. it is a double b market. there is a natural difference. in financialing credit. there is still a premium. they just very selective. over here we have an interesting hybrid market. for example, one of the issues we have in the portfolio we disclosed would be volkswagen 10-year subordinated debt. that yields serco 3%, not soupy high-yield but -- super high-yield, but in the context of bunds. jonathan: would you continue to buy cocoas from here? you looking for more capital return? where is the upside? what you looking to get from that specific trade? alan: it is more income, a tremendous rally. short dated cocoas have fallen to low yield. essentially, you are still competent -- compensated. it is in excess of subordinated corporate bonds we have over here, then you market in europe -- the newer market in europe, the so-called hybrid bonds. we carefully chart the spread of cocoas with high-yield

the offering was the biggest bond ever.he nation split the offering equally between the issue receiving $11 billion worth of .ids company sought billions of new bonds. they might want to set the lowest on the riskiest debt thing. investors wanted seven times as much as was offered. that was the discussion we had previously. still with us now, lisa from bloomberg. higgins. another big story throughout this week has been china and its aggressive spread widening we have seen through the week. chinese corporate bond yield, that premium is the highest since june of the sovereigns. how significant is this blowing out of the spread at the moment? lisa: a lot of people think it is quite healthy and that it means that the government is going to allow companies to face serious companies. -- serious pressure. we got defaults in china. should it happen it would allow a healthier market. the flipside is, the defaults and financing costs become onerous. a very narrow space in between those two scenarios of which are two completely differ

the issue with the sovereign bonds issue is you have japan thinning 10-year bonds at zero.ou have european rates at negative. those are two big gravitational polls on treasuries. can we get to 2.70? absolutely. is it a bigger story than that? we don't see that right now. jonathan: everyone sticking with me. henry peabody, subadra rajappa, and ashok bhatia. coming up on the program, the auction block. last week, tim cook opened the doors for the sale of the iphone x. this week, he was selling billions of bonds. high-grade issuers shrugging off broader market weakness. this is "bloomberg real yield." ♪ ♪ jonathan: from new york city, i am jonathan ferro. this is "bloomberg real yield." i would like to head to the auction block now. pulls theirergy option this week, high-grade issuers very much fall to the head. we begin with apple. the iphone maker sold $7 billion of unsecured bonds in six parts. it looks to fund stock buybacks and dividends. apple has been the second-most active u.s. nonfinancial issuer of debt this year, just behind at&t. you had ups with a more than $5 bil

bonds were going to pass. since then, we have all this good progress, where each bond has passed, but rec-park has been frozen at the same, more or less, level of funding. when you just look at this 10-year capital plan own escalation figures, if we were to escalate the $150 million amount, we should be at $200 million and i think arguably, we have a good case why we need more than that given the types of projects we have outstanding. we have a number of pipeline projects and they're going to come in easily over $30 million, that are both neighborhood serving, but city-wide serving and thinking about how we're going to capture all those projects? i think there needs to be some change in thinking about sizing and also what our departmental and city-wide goals are about how we want to set the priorities. this comes in easily over $400 million. that's it very quick. they want to pull some of that together. our life cycle, we hope to come forward in january with contract award with a new vendor who will complete a

taking a look at the bond space. money coming out of equities and out of the sovereign bond space in europe in today's session. yields moving higher in the core and the periphery. the 10-year bund yield up some four basis points. ais chart demonstrates it's drop in the bucket. if you look at the big context, taking this back to the start of the year, the trend has been downward. those peripheral spreads have been tightening. 2.08% inar yield, portugal. i showed the euro earlier. showing sterling now. 133-day movingd average, not a technical i normally talk about, maybe a key level. julie: we are seeing u.s. stocks still down, but well off their lows of the session, so not necessarily seeing that big magnitude drop we were talking about earlier. one of the underlying reasons why could be the turn-up that we have seen in wti. andprices spiking earlier, they remain higher by more than 1%, getting well above $57 per barrel. there could be a few things going on. first of all, according to the state-run saudi press agency,

a lot of these dirt trails with being done without the bonds i guess. not bonds, they're grants.know, there is free labor. that's great. what about the asphalt paths? where is all the money going? i want to say i thank everybody for the vision plans, but where is the master plan? when are we going to get it? until we get it, i'll keep asking, where is the master plan? very thankful, it's thanksgiving coming up, appreciate everybody's time and energy. thank you. >> secretary: next speaker, please. >> commissioners, general manager, here i am again, talking about my support for this plan, because my parents bought in mid 60s in that area because it was a family-friendly neighborhood and it was a place that you could let your kids run and play in the park. it was two lakes, paths connecting them, there were horseback riding rides, it was family friendly. and after the mid 70s, approximately, things went to disarray like albert was asassÉi assÉing -- saying, it was lack of maintenance. abandoned. a lot of burnt-out cars and place to dump a body, even. not a friendly place for familie

a route in the chinese bond market.thm is flattening in the treasury curve. >> what is troubling is how fast the curve has flattened in the last few weeks. >> it almost always flattens when the fed is putting rates up. last time i checked they are still doing so. i think what has caused people to stop and take note is the speed with which it flattened. >> you have lots of central banks around the world, even if the u.s. is going back. the bank of japan expanding a program. ecb is very involved. you are not seeing global central bank purchasing winding down. >> between 50 and 0 is the flashing sign. things are starting to get a lot more challenging. above 50 you can kind of explain it away. >> equities are doing well, credits are doing well. the economy in general in the u.s. and globally is doing well, i think they will be some willingness to look past the flatness of the curve. jonathan: joining us is lisa abramowicz, rob waldner, and joining us in a moment is alan higgins from london. i want to begin with lisa. look a

of subordinated corporate bonds we have over here, the so-called hybrid bonds.carefully chart the spread of cocoas with high-yield versus hybrids, and there is still some value in cocoas. you need to stick with national champion banks. if you like you are being compensated for the memory of 2011-2012 in national champion banks. jonathan:.interesting stuff lisa abramowicz, rob waldner and alan higgins will be sticking with us. coming up on the auction block, a race against the u.s. congress. that story is coming up next. this is "bloomberg real yield." ♪ ♪ . . with the issue receiving $11 billion. they seem to be very much gone for the time being. company sold billions in new bonds this week. the lowest interest rate on the riskiest bank debt. cocoas. is there note investors wanted seven times as much as was offered. now a discussion we had previously. lisa abramowicz, rob waldner, and alan higgins. another big story throughout this week has been china and its aggressive spread widening. top rated-year chinese corporate bond yields. that premium is the highest si

the selloff in european bond a key throughout bond markets around the world. even the bond market here in the u.s. we started the week with the very tight, the tightest in a decade. you worried about yield curve flattening, that's because our yields are not rising because of german bund yields. it's time that interest rates around the world start to normalize. nejra: talking about the curve, we have seen that stephen a little bit -- steepen on the treasuries, though trend has been for flattening. a big picture question, do you think investors are spending too much time constantly questioning rising equities, falling bond yields, instead of actually focusing on allocating within that paradigm? four are they too complacent? mr. o'rourke: if you're just allocating within those paradigms, both very extensive asset classes, that's a dangerous formula. in an environment where we have extremely easy financial conditions and very low volatility and expensive asset values, both stocks and bonds, they should be worrying and they should be thinking about cash. basically

having a look at chinese bond sales, dollar bond sales, concentrated in hong kong.e a bit of a wide berth. facing conglomerate hna scrutiny after a swiss regulator the company provided false information. group and with gate the deal there. why? this deal is close. significant change in ownership structure. rishaad: that is the big issue here. , the its own disclosures change was there and they are asking why such a change. in thenge mainly explode ownership like the last year document no mention of any executive ownership, but this they expect the ceo and cochairman to own the shares come so that is why the answer that about them. rishaad: for you what was the most interesting finding in the ruling? said the documents, they the two largest shareholders for the three individuals, indian businessman and the original chinese guy, and these swiss regulator say in the ruling that it is actually two guys who are not real shareholders. trustees fort as a, theecutives of hn real shareholders are the executives. hna failed to disclose that information. rishaad: this is getti

see that drop, but not corporate buying bond -- bond buying drop. to the heart of limitations and qe. they might run out of some of the bonds to buy. thatat's one of the issues markets have been focusing on. there's also these guidelines that are self-imposed. for thisas room maneuver. there has been corporate bond buying, which has had a tremendous effect. this might be creating a bubble there. that might be helpful for eurozone corporate. they know that september 2 thousand 18 would never be a finite date. people want to keep their option and they haven't done anything until the options are clear. >> i want to talk about the corporate debt market. pointhe ecb ever get to a where they can trust the economy ? it seems to me if you took the , peopleof the equation would not have yields this low. >> this bond yields across the this a search for yield, behavior. effect. a distorting that's what people are saying and all of the latest data. people thought that would be associating with rising bond yields across the board. -- thered accommodate would be

let's talk about the bond markets. couple of different stories on the bloomberg terminal. this is the stage of play, bunds and u.s.o pips treasuries fall lower. what does mr. good friend made for the fomc? same speechwriters. keep an eye on french bonds, they will underperform because you're going to have a huge supply coming into the market in 2018. this will be one of the biggest losers, the yield is likely to take place in the second half of the year. the country is set to see it looked of supply. thean bunds will face environment. this is the view from deutsche bank. and on the other side saying that economic strength points to the ecb forecast of grade. could the ecb morph as move more aggressively? that is the risk for 2018. bywill get a view of markets our guest. let's get to juliette saly, with the first word news. juliette: u.s. president has nominated marvin good friend to be a governor of the federal reserve. he is widely respected my three economist and some time critic of the fed under yellen. a professor

>> are you asking just about the tax-exempt bond analysis? we have a document that explains in detail how we do estimates of proposed changes in the tax-exempt bonds and we look at a portfolio model where we try to compare what alternative after-tax rate returns ar of rer about otherwise be tax-exempt and how the change might shift to the holders and would be affected rates are and how it might change the holdings of the instrument by taxpayers and we measure that all elective to the projections, the baseline projections of the issuance of different types of tax-exempt securities, so for example we tried to track the amount of debt goes to private activity bonds as opposed to governmental. >> are you finding the private activity bonds fully utilized or is it underutilization? >> as i know you are aware there is a volume cap on a number of types of tax-exempt debt. some of the volume is carried forward which is intended for utilization. >> in the past, but congress has a direct amount. so you could affect the overall cost to the treasury by se

year to date, triple c bonds have underperformed than double b bonds of. -- bonds., theorate year-to-date the terms are lower. that is basically what the market is telling you. you are not getting paid to go down that triple c. jonathan: the message in the previous segment was about sovereign debt and the weight on the long end of the yield curve. does the same apply for corporate credit? the you have to think about of the amount of foreign flow coming into the united states spurred by the ecb and president draghi? that has been the story of the last several years. 40% is now owned by foreigners. thechange in the dynamic, relative value dynamic because of the cross currency basis or because of spreads in the u.s. no longer offering value have to be watched closely. we could see an exit of demand. jonathan: goldman sachs in their top 10 for 2018, late cycle imbalances. they are not talking about leverage. they are talking about illiquidity. how much concern the you paid illiquidity in spaces like high-yield and do you promote a more active approach with these kind of

taking a toll on the corporate bond market.th me is john. john, your take on china? csi 300 biggest drop. what does this spillover mean? >> there is a tightening of liquidity going on. investors have learned that china goes through these patents on tightening liquidity and then loosening again. organizedeen a better episode of tightening. reformse made descent along the way. it is worth watching, and the speed of increase and bond yields has -- mark: we have periods of global markets in china increase over the years. are we approaching another january, cited as a time for this kind of thing? are we approaching another global, china-induced period are not? john: there are signs of slowing. you have seen a fairly significant tightening of liquidity when you look at money supply growth that slowed very sharply. i guess people are saying, well, things -- not much has happened, so maybe we are fine, but ignoring the fact that you can get quite long lags between policy changes in the market effect. we are not ruling out some china-le