Earlier this week the NOAA updated – and reaffirmed – above average precipitation expected for much of the US in the coming month. With many municipal bond issuers already stretched financially and FEMA stretched logistically, the ability to prepare and recover from resulting floods is yet another risk factor that needs to be assessed across the municipal bond ecosystem.
Comparing the NOAA forecast with a couple of risQ’s inland flood obligor analyses at state level, and at school district levels for Louisiana and West Virginia – show just a couple of views.
For municipal bond investors, it’ll be just as critical to look beyond the GO issuers and to health systems, CCRCs, and higher ed, each of which have historically had greater levels of credit impairment and are already in the midst of additional financial strain from COVID-19. Any impact on a facility or on its surrounding area will flow into the speed and quality of financial recovery.