Finance
| More

Bond Bits: Ill Winds Aftermath

BY: Sarah Harney | December 2005



Few Gulf Coast issuers have reneged on outstanding bonds since hurricanes Katrina and Rita ravaged the area. But concern about their ability to continue to make payments is growing.

In November, Moody's Investors Service dropped $700 million in New Orleans debt to junk bond ratings, citing concerns about the city's ability to fund ongoing operations or credibly forecast its incoming revenues in the near or medium term.

The state is working to avoid a similar fate. The Louisiana legislature knows it can't keep spending as usual, and lawmakers are making budget cuts to cope with an estimated $1 billion in lost revenues and growing added costs.

Meanwhile, to help smaller governments in the state from defaulting, the Louisiana State Bond Commission last month approved loans of $500 million through the federal Community Disaster Loans program. The loans will cover the localities' cash flow needs until their tax bases begin to recover.

For more information on the impacts of this year's hurricanes on municipal debt, go to www.bondbuyer.com.


If you enjoyed this post, subscribe for updates.

Comments



Add Your Comment

You are solely responsible for the content of your comments. GOVERNING reserves the right to remove comments that are considered profane, vulgar, obscene, factually inaccurate, off-topic, or considered a personal attack.

Comments must be fewer than 2000 characters.

Latest from Finance

  • Job Skills Gap a Growing Concern in Cities
  • Cities coming out of the recession are facing new challenges with matching their workforce to available jobs, a problem that could be an early indicator of a growing national problem.

More From Finance

Featured on Governing.com





Jobs in Finance

Browse thousands of available finance jobs. Find a finance job with detailed, free information on key career areas in finance. Or post a job.

View or Post Finance Jobs

Finance Newsletter

Our monthly email newsletter provides an exclusive review of issues relating to financing of government operations, including taxation and revenue, budget policy, bond financing and public pensions (monthly).

View Sample

Subscribe to GOVERNING Newsletters

 


© 2011 e.Republic, Inc. All Rights reserved.    |   Privacy Policy   |   Site Map