Warning Signs Flash For Muni Bondbuyers Chasing Riskiest Debt
- Firm says key measure of distress rises 30% to most since 2015
- Figures reflect results of ‘incredible appetite for risk’
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There’s an alarm bell sounding for investors who’ve been plowing into the riskiest state and local government bonds.
So far this year, 108 borrowers who raised cash in the $3.8 trillion municipal market have run into troubles grave enough that they skipped debt payments or violated other financial terms of their bond contracts, like drawing down their cash reserves, according to data compiled by Municipal Market Analytics. That’s a 30% jump from the same period in 2018 and the most since 2015.