The Public Purse offers you serious thinking about economic, financial and political trends at the U.S. state and local level with a focus on municipal credit risk
TAG | municipal bond default
19
troubles in toledo
1 Comment | Posted by Natalie Cohen in bankruptcy and default, cities, municipal bonds
Looks like the city is making its best effort to try to resolve budget imbalance. Ohio is one of the states that has a strong oversight/receivership program and municipalities may not file bankruptcy without approval of the state. Local governments there do rely on income taxes, which is tough in the current economy, especially in [...]
16
Rethinking Municipal Guarantees, “look-throughs” and Ratings
0 Comments | Posted by Natalie Cohen in bankruptcy and default, municipal bonds
Harrisburg, Pennsylvania can’t really afford to pay for the Resource Recovery bonds that it guaranteed. Their recently adopted 2010 budget does not include debt service for this guarantee (see prior post with link). It is accepted practice for rating agencies to rate municipally (or state) guaranteed debt off the credit of the guarantor. Unlike bond [...]
18
California Mello-Roos Bond Defaults Likely to Increase
0 Comments | Posted by Natalie Cohen in bankruptcy and default
In a recent report about Mello-Roos Community Facility Districts (CFD’s) the California Debt and Investment Advisory Commission (CDIAC) stated:
Despite the potential impacts of evolving mortgage conditions, CFD’s have not reported higher default rates, at least through 2007-2008, but have reported a recent rise in the number of their draws on reserves.
(Mello-Roos bonds are post-proposition 13 [...]
14
Prichard, Alabama fails to pay retirees
1 Comment | Posted by Natalie Cohen in bankruptcy and default, bond insurance
The check is not in the mail. Prichard, Alabama, came out of Chapter 9 bankruptcy in 2002 and promised to make deposits into its public pension fund. They didn’t and now they are simply out of money. Retirees did not get their October 1 payment. What’s next? The retirees are suing. The city is looking [...]
12
The Municipal Bond Default Story, Part II
0 Comments | Posted by Natalie Cohen in bankruptcy and default, municipal bonds
Municipal bond defaults over the last two years occur in sectors that tie into the financial crisis: real estate. Multi-family housing and land development projects that never took off are at the front line. Special entities – usually a district of some kind, depending on the state – sell tax-exempt bonds to finance infrastructure for [...]