As the coronavirus crisis continues to unfold, our study of past municipal defaults helps shed light on what we can expect going forward. We will discuss historical default trends between 1970-2019, year-to-date 2020 performance, and what we expect going forward as the effects of the pandemic linger. We will also touch on recent developments for Puerto Rico credits.
- Recent developments: no defaults in 2019 but two so far in 2020
- No defaults directly attributable to virus shutdowns but longer term cultural changes merging as potential credit drivers; still no natural disaster defaults
- Recent credit trends (non-debt leverage, fixed costs, etc.) continue; economic growth counters these trends, bolsters "shutdown resilience"
- Operational fundamentals drive defaults, not legal pledge; pledge important in recovery
- Recent developments in Puerto Rico
- Naomi Richman, Senior Vice President (Moderator)
- Al Medioli, Senior Vice President/Mgr/RPO
- Sarah Jensen, AVP-Analyst/RPO
- Genevieve Nolan, VP-Senior Analyst