Excellence in Business Leadership: Samuel Loeffler ’20 investigates recovery rates in municipal bond default

The Love Award for Excellence in Business Leadership provided the finance major with an opportunity to further explore municipal bankruptcy, connecting his research with his studies and experiences from the professional world.

Through the Love Award for Excellence in Business Leadership, Samuel Loeffler ’20 deepened his understanding of how municipal bonds trade in the market, ultimately helping prepare him for his future role as an analyst on the Emerging Markets desk at Jefferies in New York.

headshot of Sam Loeffler
Samuel Loeffler ’20, recipient of the Love Award for Excellence in Business Leadership

Established by a gift from The Martha and Spencer Love Foundation, the Love Award for Excellence in Business Leadership honors and provides a student in the Martha and Spencer Love School of Business with $12,000 to complete an independent research project on a business-related topic.

Loeffler investigated the aftermath of municipal bankruptcies and applied his findings to determine recovery rates and reveal recent structural breaks in municipalities repaying their debt. He also explored how bankruptcies affect the living conditions of the municipality. He conducted a quantitative analysis of important metrics such as unemployment rates and per capita income to determine the impacts of default in municipalities. Additionally, he looked at qualitative figures such as governance, standard of living and infrastructure to help determine the effects of bankruptcy.

“To accurately capture the evolution of municipal bankruptcies over time, analysis was conducted for both recent and historic cases of default, comparing statistics and policies used across incidents,” Loeffler explains.

Kate Upton, assistant professor of finance and director of the William Garrard Reed Finance Center, mentored Loeffler throughout the research process.

“During her Fixed Income Analysis course, our class studied municipal bankruptcies and Dr. Upton shared her personal experience of being from a town that recently defaulted on billions of dollars of debt,” Loeffler recalls. “Her ability to share her knowledge on this topic has provided me with valuable information for my project. She has provided me with countless resources and has always been available to answer any questions I have.”

Loeffler connected his research with his coursework and internship at Jefferies as a fixed income sales and trading summer analyst, enhancing his ability to understand and quantify default risk. “This understanding will apply directly for my immediate career in emerging markets as I will be dealing with default risk almost every day,” Loeffler notes. “The ability to measure it and comprehend what it entails for all parties involved will be a critical part of my future job.”

Loeffler completed his research paper after Elon shifted to remote learning due to the COVID-19 pandemic and was originally scheduled to present it at the Student Undergraduate Research Forum (SURF) on April 28. In the later stages of his project, Loeffler saw COVID-19 bring an unexpected perspective to his research as the disease began to have a material impact on the U.S.

“COVID-19 has shined a light on companies, cities and countries around the world that are in fiscal stress,” Loeffler shares. “Entities that are already at risk of defaulting have been placed in an even more harsh financial situation. This pandemic, among many things, has proven the value in the ability to measure and understand default risk. It will be interesting yet concerning to see what municipalities will come under severer fiscal stress following this pandemic.”

About Samuel Loeffler ‘20

Hometown: Baltimore

Major: Finance

Elon Activities
Elon Men’s Soccer Team
CFA Institute Research Challenge
Student Government Association (treasurer and member of the finance board)
Elon Investment Banking Club

CAA Academic Honors (multiple semesters)
President’s List (multiple semesters)

Study Abroad
WT 2020: Critically Engaged Eco-tourism in New Zealand
Spring 2019: Men’s Soccer Study Abroad to Spain and Portugal

Jefferies – Fixed Income Sales and Trading Summer Analyst
T. Rowe Price – U.S. Intermediaries Intern

Relay for Life
Special Olympics
Cystic Fibrosis Walk