Distress Rises in Muni-Bond Market as More Borrowers Face Strain
Distress is rising in the $3.8 trillion municipal-bond market.
The number of borrowers reporting so-called impairments, such as a breach of the financial terms contained in the securities contracts, rose to 101 so far this year, up 41% from the same period in 2018, according to Municipal Market Analytics. At the same time, 33 skipped interest payments for the first time, compared with 21 a year earlier, though the size of the outstanding debt involved declined.
Sales of bonds by borrowers in the riskiest corner of the municipal market have increased in recent years as low interest rates leave investors...