If you're really interested in this type of security, here's a good primer I found from Orrick Herrington & Sutcliffe: An Introduction to Pension Obligation Bonds and Other Post-Employment Benefits.
I would have thought that governments could segregate the market investments and use them as securities for the bonds (much as CEFs use their portfolios as securities for the bonds/preferred stock they circulate to achieve leverage). I was wrong, but there are still some other ways to back up the debt (albeit not often used, and probably not likely here).
Regarding Franklin and Oppenheimer, I don't think it's fair to lump them together. Franklin had a single fund that was designed to be tax free in every state. So it had to invest in munis from territories (PR, US VI, Guam, etc.), and the elephant in the room is Puerto Rico. No real way around investing in the territories, as clearly disclosed in the prospectus of the fund designed to do that.
Oppenheimer Rochester funds take on risk simply for the sake of juicing returns. So they load their state-specific funds with territory bonds, notably PR. ISTM this is very different. Check out the top ten funds (by percentage of AUM) invested in PR in mid 2015: the Franklin Double Tax Free Income Fund (FPRTX), followed by nine Oppenheimer Rochester funds, mostly single state, with a couple of national muni funds:
https://www.usatoday.com/story/money/markets/2015/06/30/puerto-rico-bond-funds-exposure/29515913/

Thanks @Ted.
Peak to trough, the Russell and Midcap Indexes lost more than 20% in 2015-16, and the equal weight S&P lost 18%.
Close enough for me.

FYI: It has been almost nine years since the last U.S. bear market, as defined by a 20 percent or more decline in the S&P 500 Index. That’s the second-longest stretch without one since 1928, according to Yardeni Research Inc. Only the period from December 1987 to March 2000 was longer.
Regards,
Ted
https://www.bloomberg.com/gadfly/articles/2018-01-25/move-over-groundhog-the-bear-holds-a-lot-of-market-answers

Load fund companies, including PIMCO, have always had a problem offering their funds without a load. If they simply sold A shares noload direct to the public they'd alienate their commission-based broker dealers. So they came up with many different ways of making it seem that they were protecting their sales force.
Offering multiple share classes was one way to do that. Selling only through brokerages (with added 12b-1 fees) or wrap accounts was another. Back in 2011 Prof. Snowball noted the PIMCO was doing that: "For what it's worth, you need to look for "D" class shares [for noload retail purchases] and you need to have a brokerage (Schwab, Scottrade ...) account. PIMCO does not sell directly to the public.."
https://mutualfundobserver.com/discuss/discussion/1534/pimco
Recently, several fund companies have started selling A shares (or F-1 for American Funds) NTF through selected brokerages. PIMCo's just following this trend. At the same time, A shares continue to be sold with front end loads through other channels. Because of that, it's not going to dump A shares. Why not get rid of D shares instead?
PIMCO recently adjusted its fees on its Income Fund, perhaps in anticipation of this. According to the latest prospectus, D shares had been cheaper than A shares (0.82% vs. 0.88%). At the beginning of October, PIMCO raised the fees on both A and D shares, but raised the D shares more (0.11% vs. 0.06%) to equalize the share costs. Coincidence? You decide.
In short, by increasing D share fees on funds where they were below A share fees and migrating customers to A shares, PIMCO can easily simply its lineup and reduce its costs while simultaneously increasing the fees it collects. I fully expect the A shares to be available NTF, if not through all discount brokers then at least some strategically selected ones, just as American Funds initially rolled out NTF F-1 shares through just Schwab and Fidelity.

FYI: Any time the stock market reaches all-time highs, the contributing factors are varied and their influences are impossible to measure. What we do know is that American companies for several years now have enjoyed steadily increasing profits, which are finally resulting in lower unemployment figures.
Offsetting the exhilarating “high” we feel these days should be the question, “What’s next?” For many, the answer is to mix some bonds into the portfolio. While this would seem to make sense in this day and age, the concept developed only as late as 1929. Walter Morgan, a young accountant for wealthy individuals, felt that something better than timing the market would offer a better mousetrap for people wanting to benefit from strong markets while, at the same time, limiting their downside.
Regards,
Ted
https://www.mercurynews.com/2018/01/25/balanced-fund-investing-only-half-the-freak-out-during-a-stock-market-slide/
M* Snapshot VWELX:
http://www.morningstar.com/funds/xnas/vwelx/quote.html
Lipper Snapshot VWELX:
https://www.marketwatch.com/investing/fund/vwelx
VEWLX Is Ranked #3 In The (50/70 Equity)) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/allocation-50-to-70-equity/vanguard-wellington-fund/vwelx

https://www.sec.gov/Archives/edgar/data/1697268/000139834418001012/fp0030652_497.htm
497 1 fp0030652_497.htm
Berwyn Fund
(Ticker Symbol: BERWX)
A series of The Chartwell Funds
Supplement dated January 26, 2018, to the
Prospectus, Summary Prospectus and Statement of Additional Information (“SAI”),
each dated July 17, 2017, as supplemented.
*** Important Notice Regarding Proposed Fund Reorganization ***
Based on a recommendation by Chartwell Investment Partners, LLC, the advisor to the Berwyn Fund, the Board of Trustees of the Trust has approved a proposed reorganization (the “Reorganization”) of the Berwyn Fund into the Chartwell Small Cap Value Fund, subject to the approval of the shareholders of the Berwyn Fund.
In order to accomplish the Reorganization, the Board approved a Plan of Reorganization (the “Plan”). The Plan provides for the acquisition of substantially all of the assets of the Berwyn Fund by the Chartwell Small Cap Value Fund in exchange solely for shares of the Chartwell Small Cap Value Fund, which would be distributed pro rata by the Berwyn Fund to the holders of the shares in complete liquidation of the Berwyn Fund. Shareholders of the Berwyn Fund will become shareholders of the Chartwell Small Cap Value Fund, receiving shares of the Chartwell Small Cap Value Fund equal in value to the shares of the Berwyn Fund held by the shareholders immediately prior to the Reorganization. The effect of the Reorganization will be that the Berwyn Fund’s shareholders will become shareholders of the Chartwell Small Cap Value Fund. The Reorganization is intended to qualify as a tax-free transaction for federal income tax purposes.
*****
The Trust will call a shareholder meeting at which shareholders of the Berwyn Fund will be asked to consider and vote on the Plan. If shareholders of the Berwyn Fund approve the Reorganization, the Reorganization is expected to take effect in the second quarter of 2018.
Shareholders of the Berwyn Fund will receive a combined prospectus/proxy statement with additional information about the shareholder meeting, the proposed Reorganization and the Chartwell Small Cap Value Fund. Please read the proxy materials carefully, as they will contain a more detailed description of the proposed Reorganization.
Please file this Supplement with your records.

If I understand correctly, they're closing class D. So it's not about savings, it's about making the funds load only, unless you can afford the institutional class. Is that right?

Yes. The language in Pimco's supplement seems to make that clear. But if you're in a fund's D shares on conversion date, you get converted to the A shares with no load, and can continue on your merry way to buy that same fund without a load in the same account.
Beyond that, Pimco apparently hasn't allowed LW A shares (they don't at Fidelity, at least), so any new 'small' investors (or old ones wanting to buy a fund they didn't own before) would pay a load. Seems a similar effect to a soft close on the entire Pimco OEF lineup at DIY investor-share level ... unless you like loads.
Vanguard's $25k I-share minimum for Pimco funds is going to look a lot more attractive come March.

My "retirement" job is putting in gardens for people retiring in their homes but are no longer able to do some of the work. A lot of what I do is building raised beds to help ease the bending and lifting discomfort. The price of cedar this spring is up 27% this winter over the end of summer, and sustainable redwood is up 36%. For some, who have gardened for 50-60 years as a labor of love without putting a dollar amount to their time, the costs of a raised bed or rototilling has them visibly stepping back. This cost increase is going to make getting work harder. For several years retirement communities with budgets kept me comfortably going, but even they have balked at this year's cost estimates for spring work.

PONDX and PONAX have exactly the same net exp. ratio .90% plus 12-b1 fee .25%. No savings to the customer on this one that I can see.

Hi @Ted and @Mark
Baby remodeling here and there.............but, do'in the math for all of the soft lumber material in the house + new build cost which = "how much more can I sell the house for today and in the near future based upon the inflation rate of "soft timber products", including oriented strand board, etc.
'Course the other side of the equation is that baby boomers and their parents are and will be dying away = more homes on the market which may affect prices downward and that interest rates may climb enough more to ding mortgage rates and presto-magico, the affordability index moves against new buyers. Keep in mind, only we older ones here and in the house marketplace remember how high mortgage rates can be.....
Current house buying generation will pee their pants if mortgage rates move above 5%.
My 2 cents worth.
Take care,
Catch

Conversion. At a meeting held on November 14, 2017, for each series of PIMCO Funds (the “Trust”) that offers
Class D shares (each, a “Fund”), the Board of Trustees of the Trust approved the automatic conversion of the
Fund’s Class D shares into Class A shares of the same Fund, and concurrent closure of the Fund’s Class D shares.
https://www.sendd.com/yourproof_new1.cfm?uuid=3DBD907F-5056-817E-2004F20592E6960B&[email protected]

FYI: The bull market may now be facing its ultimate threat: Tom Brady and the New England Patriots.
That’s because the Patriots are 5 ½ point favorites to win the Super Bowl on Feb. 4 and the venerable Super Bowl Indicator is bearish whenever the victorious team traces its roots — as can the Patriots — back to the original American Football League.
Regards,
Ted
https://www.marketwatch.com/story/why-a-patriots-win-in-super-bowl-lii-could-be-bearish-for-the-stock-market-2018-01-22/print

Hi @hank
Like the infomercial: But, wait there's more.....
http://thehill.com/policy/finance/358545-us-slaps-duties-on-canadian-softwood-lumber

What keeps running through my mind is that the market, with all the extra slush and perceived future slush, has reset it's baseline on value. I am picturing a sort of forward leading inflation that will lead to domestic inflation corrections. People have always talked about "just inflate our way out of it".

Yup - Beginning to look like the days of worrying about deflation are ending. Those of us who recall shopping in the 70s may remember the stock-boys in groceries busily marking-up the prices on bread, ketchup or beer while we shopped. Bread might be 29-cents when you walked in the door and 33-cents by the time you walked out.
The tip off is the slumping dollar. Translates into higher prices for consumers.
Here’s a blurb re rising lumber prices. http://missoulian.com/news/local/lumber-prices-have-timber-mills-cheering-but-home-builders-passing/article_9eae1c30-1a8e-541e-bc4d-a5e9f2011339.html
I think Bloomberg reported a 24-year high in lumber on Friday - but I’m unable to confirm that.
Anybody altering their investment approach in response to this potential sea change?

Hello.
Here is the weekly barometer report for the week and month ending January 26, 2018. I close each month on the last Friday of the month.
The S&P 500 Index has gained (year-to-date) about 7.5%. And, with this ... the barometer closed the week and month with a reading of 127. (The lower range mark has been expanded on the scale and ends at 120 while the higher range now ends at 180 with 150 being the midpoint). It opened the year with a reading of 138. The S&P 500 Index moved from the low range of overvalued (138) on the barometer's scale to the high range of overbought (127) with some saying (now) extremely overbought. Generally, a higher barometer reading indicates there is more investment value in the Index over a lower reading. In checking the short interest for the month it has moved from 1.7 days to cover to 1.9 days. Seems some investors are increasing their short positions.
In following the S&P 500 Index sector compass the current lead pack consist of XLE (energy), XLK (technology) and XLY (consumer discreationary) which is also the lead and my spiff hound.
In following the global compass the current lead pack consist of EWJ (Japan), EEM (emerging markets) and GSP (commodities) which is also the lead and my spiff hound.
I'm thinking with stocks at their current overbought valuation February just might be the month that a pullback developes as prices are out pacing earnings growth. Enjoy the ride before the train starts down the mountain. My spiff positions can get converted to cash real quickly before my profit in them gets vaporized should their be a pullback and they start to falter. Once the trains reaches a valley ... Well, I'll be back into those spiffs (special investment positions). Selling out of the spiffs would raise cash within my portfolio by about 2% to 3%. This will incease as I grow these spiff positions upward to about 5% of the portfolio.
Thanks for stopping by and reading.
I wish all "Good Investing."
Old_Skeet

FYI: Marvin Schwartz, one of Neuberger Berman’s most renowned investors, joined the firm’s research department in 1961 at an hourly wage of $1.25. He caught the eye of Philip Straus, the great contrarian investor who was one of the firm’s first partners, and who taught Schwartz the tenets of value investing. Today, Schwartz leads Neuberger’s Straus Group, whose stock picks have roundly beaten the market for the 30 years that Neuberger has kept track, even counting a recent disappointing stretch when oil investments fizzled
Regards,
Ted
http://www.cetusnews.com/business/An-Investment-Pro-Who’s-Seen-It-All-Still-Sees-Upside-for-Stocks.r1TAD5FSz.html

FYI: The level of stock markets differs widely across countries. And right now the U.S. is leading the world. What everyone wants to know is why—and whether its stock market’s current level is justified.
We can get a simple intuitive measure of the differences between countries by looking at price/earnings ratios. I have long advocated the cyclically adjusted price/earnings ratio, or CAPE, that John Campbell, now at Harvard University, and I developed 30 years ago.
Regards,
Ted
https://www.barrons.com/articles/america-the-worlds-priciest-stock-market-1517019872

John Rekenthaler's thoughts on the matter: "Putting Larry Fink's Corporate-Governance Comments to the Test"
http://www.morningstar.com/articles/845217/putting-larry-finks-corporate-governance-comments-to-the-test.html
The original thread, including link to Fink's letter:
https://www.mutualfundobserver.com/discuss/discussion/38101/blackrock-s-message-contribute-to-society-or-risk-losing-our-support

Hi @Junkster
I'm burning the late night candle for this already long day; but I must note...........
........you've been shoulder deep in bondland for many a day, many more than I am able to know or ever count for our house, but I sure as heck have a tough time looking around right now for a bond sector I would choose to be involved with...
We've been in an ever changing mix of bonds since the melt, the only remaining at this point is FCBFX. Your bond method of course is a much different approach than this house, but I suspect we're both to the positive side sufficiently.
We're up to our arses in equity at this point; approaching the 87/13 of equity to bond.
This was a point attained when we unloaded equity in June of 2008.
Is one able to be lucky two times in a decade???
As the technical indications are riding the high rail and not being sure that fundamentals have a lot of meaning right now; I suspect I will have to track as many articles about every type of retail investor piling into the equity market as my next best signal of a top.
Okay, time to switch my headphone music from Steppenwolf-Monster to something a bit smoother before pillow time, like Ravel; no, Vivaldi-Four Seasons.
ADD: Forgot to note, 10y Treasury yield was intraday at 1.375% on July 5, 2016. WHEW!
Take care of you and yours.
Catch

Still got lsbrx and tones of Private individuals bonds
Recently bought Teva pharmaceutical Corp bonds and Macy's Corp bonds... Both took beatings but long term looks good... Also bought chimera preferred stocks Cim.b biotechnology yield 6.5% due 2025
Also
Hughes systems satellite (private company bonds) and southwestern energy
all are bbb- rated or higher