Coronavirus disclosures show strains despite dip in filings

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While coronavirus-related disclosures to the Municipal Securities Rulemaking Board dropped last week, those filed demonstrate the increasing strain municipal issuers are feeling as they try to meet their obligations.

The total number of COVID-19 disclosures reported to EMMA for the week ending Aug. 9 was about 700, down from nearly 1,000 the previous week, according to the MSRB’s weekly report released Tuesday. But among the secondary market disclosures are some serious indications that issuers are becoming increasingly squeezed.

The 60 rating change disclosures filed eclipsed any of the previous nine weeks, as did the three principal and interest payment delinquencies disclosed. The single disclosure of a financial obligation — an event reflecting financial difficulties was only the seventh such filing since the MSRB began tracking COVID-related disclosures going back to the start of the calendar year.

New York Gov. Andrew Cuomo, whose state leads all others in coronavirus disclosures, is among those calling on the federal government to move quickly to provide new relief.

That filing, which was made in relation to $44 million of Miami, Florida Health Facilities Authority bonds issued in 2017, indicated that the obligors entered a forbearance agreement as a result of a failure to maintain the required debt coverage ratios and the obligated groups and master trustee agreed to set revised days cash on hand and debt service coverage ratio covenants based on revised projections.

There were a total of 422 secondary market disclosures reported to EMMA, down from 607 the prior week.

States and localities are feeling the pinch with the added uncertainty of when and to what extent they might receive federal aid. Lawmakers have been slow making progress on a coronavirus relief bill, and it's unclear how much direct aid state and local authorities may get.

New York Democrat Gov. Andrew Cuomo and Arkansas Republican Gov. Asa Hutchinson, the chair and vice chair, respectively, of the National Governors Association, released a statement Monday calling on the federal government to move swiftly to provide aid. The NGA has consistently called for $500 billion in unrestricted state aid.

“This resolution should avoid new administrative and fiscal burdens on states,” the pair said in a joint statement. “It is essential that our federal partners work together to find common ground to help restore our nation’s health and protect our economy.”

New York issuers have led the nation in coronavirus-related disclosures, now totaling 1,581. The Empire State is followed closely by Texas at 1,498 and California at 1,227.

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Coronavirus Municipal disclosure Primary bond market Washington DC Secondary bond market MSRB