The red hot municipal bonds space is being rattled by default fears, as some high profile investments begin to unravel.
The risk of municipal-bond defaults in the future is “higher than it’s been in quite some time,” said Deutsche Bank’s Pollack, because of the unprecedented stress on state and local budgets.
…
Harrisburg, the capital of Pennsylvania, has considered filing for reorganization under Chapter 9 of the U.S. bankruptcy code as it faces $68 million in debt.
About $2.4 billion of Florida’s so-called dirt bonds, or debt to finance real-estate developments, used reserves or failed to make interest payments in November, up from $1.7 billion in May, according to Interactive Data Corp. That’s the largest amount on record and “reflects an increasing trend,” said Edward Krauss, an analyst for the Bedford, Massachusetts- based research firm, in an e-mail.
Join the conversation about this story »
See Also:
- Barney Frank’s Insane Muni Bond Guarantee
- Bill Coming This Week To Guarantee Entire Muni Market
- Momentum Builds For Big Muni Bailout