Most U.S. municipal debt issuers could weather a period of diminished or more costly capital-market access because they can control long-term debt requirements in ways that corporate and sovereign issuers cannot, according to a Moody’s Investors Service report released Thursday.

The document indicates that relatively few issuers rely on the markets to fund short-term operating needs.

The municipal issuers facing the greatest credit stress from more hostile market conditions finance deficits through bond issuance, rely on short-term notes to finance seasonal cash-flow needs, issue bond anticipation notes, or need to convert variable rate to fixed-rate debt. They include Illinois, California, and Arizona.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.