Abstract
<h3>Practical Applications Summary</h3> In <b><i>Credit Risk Assessment and Monitoring of TIF Bonds</i></b>, published in the Winter 2018 issue of <b><i>The Journal of Structured Finance</i></b>, authors <b>Deog Sang Bae</b> and <b>Ivan Damnjanovic</b>, both at <b>Texas A&M University</b>, present a new method for analyzing tax increment financing (TIF) bonds using publicly available data. They introduce a method of mathematical analysis for obtaining early warning signals of potential credit distress. Issuers of TIF bonds invest the proceeds of the bond issuance in designated zones to improve those areas and in expectation of an increase in property tax revenues resulting from that investment. Those additional revenues are intended to repay the TIF bonds. The analysis focuses on changes in economic indicators at the national, regional, and local levels that collectively serve to signal stress on the designated zones. The authors use as a case study the TIF bonds issued by the Uptown Development Authority in Houston, Texas. <b>TOPICS:</b>Credit risk management, legal and regulatory issues for structured finance
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