Coronavirus-related disclosures top 9,000 since beginning of pandemic

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Mark Kim, MSRB's chief operating officer, had predicted an increase of COVID-19 related disclosures week over week from municipalities.

Coronavirus-related disclosures surpassed 9,000 since the beginning of the pandemic, up over 800 in the last week.

In a weekly disclosure report released by the Municipal Securities Rulemaking Board Tuesday, the MSRB showed an increase to 9,033 filings of governments disclosing the financial impact of COVID-19 since the beginning of the year, which is a growing trend since the MSRB began the reports back in April.

Over the past week, primary market COVID-19 related disclosures increased to 2,926 filings from 2,529 the week prior. Continuing disclosures increased to 6,107 filings from 5,677. Continuing disclosures are provided to the market on an ongoing basis.

Over the past week ending June 14, the number of bond calls increased slightly to 70 from 60. Rating change filings also increased to 724 from 681.

S&P Global Ratings lowered its rating to BBB from BBB-plus on the Port Authority of New York and New Jersey’s senior secured series 6 and 8 special project bonds issued for the John F. Kennedy International Air Terminal.

“The downgrade reflects an unprecedented drop in airport passenger volumes in 2020 due to the COVID-19 pandemic and our expectation of a prolonged period of reduced volumes due to a potential recession and an uncertain path of economic recovery,” S&P Global analysts wrote.

During a Bond Dealers of America webinar last week, Rebecca Olsen, director of the Securities and Exchange Commission’s Office of Municipal Securities, was asked whether the SEC was happy with the quality and quantity of issuer disclosures since the pandemic began.

“Week over week we’ve seen consistent increases in the number of disclosures coming in,“ Olsen said, referencing the MSRB’s weekly disclosure report.

“A disclosure is not required, it’s voluntary,” Olsen said. “It has been impressive to see those numbers. Are there some who aren’t disclosing still and should be thinking about it because they have been impacted? Sure, but I would definitely want to compliment those that have done so already.”

The SEC has no explicit authority to mandate the content of disclosure by municipal issuers, but issuers are required by their continuing disclosure agreements with investors to disclose certain financial information on an ongoing basis.

The SEC is hosting its municipal conference virtually this afternoon to discuss disclosing financial information during a pandemic. The SEC has frequently called on issuers to provide more timely information, even if not strictly required to do so under their continuing disclosure agreements.

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