| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Credit Impact Of Widespread Fires In Southern California Being Monitored |
SAN FRANCISCO Oct. 25, 2007--Standard & Poor's Ratings Services is evaluating the entities most likely to be materially affected by the very large wildfires, both currently burning and recently extinguished, in seven Southern California counties. The seven counties affected are: San Diego; Orange; Los Angeles; Riverside; San Bernardino; Ventura; and Santa Barbara.
The situation is rapidly changing, with many fires still burning out of control at very low levels of containment. As such, the overall financial impact is currently unknown and will remain so for several days. Emergency response and fire suppression costs, as with the 2003 firestorm in the same region, will likely be almost fully reimbursed by the federal and state government, although costs could strain liquidity in the short-term for more vulnerable credits.
The state has indicated that its Forestry and Fire Protection Department will likely exceed its budget of $82 million for fiscal 2008 due to the fires. However, the state should be able to handle unbudgeted exposure to fire-related costs or reimbursements to local governments. The state's budgeted general fund reserve and stabilization account balance, which measured $4.1 billion as of June 30, 2008, should prove sufficient even considering the state's recent, unbudgeted $500 million pension payment and weak revenues (about $777 million below forecast) through October 2007.
Locally, significant declines in assessed valuation due to destroyed property could impact property tax-related revenues until properties are reconstructed. Revenue bond ratings for health care, utility, public power, transportation, higher education, and other related credits could be impacted to the extent that related revenue streams are affected and/or to the extent that damage to essential facilities occurs. Facility damage, absent insurance or special emergency or grant funding, could escalate capital spending and borrowing needs, and, in turn, increase issuer leverage.
The credits that are potentially more vulnerable include local community facilities districts (CFDs), assessment districts, redevelopment agency project areas, hospitals/health clinics, and other credits small in size, given the fact that some fires could damage or destroy all or a portion of the tax base or structure, or distress concentrated or limited revenue streams. Other credits that potentially have higher risk include those without debt service reserve funds, revenue raising flexibility, or strong legal provisions such as rental interruption insurance on leases. Property tax payment risk, due to home or business losses, could also be an issue. However, all of the counties (except for Los Angeles), are on the Teeter Plan, a tax distribution procedure by which secured roll taxes are distributed to participants on the basis of the actual tax levy, rather than actual tax collections. Teeter Plan counties receive the benefit of all future delinquent tax payments, penalties, and interest, but also bear the risk of loss on delinquent taxes that go unpaid. The Teeter Plan provides participating local agencies with stable cash flow and eliminates collection risk. Counties usually benefit, with eventual collections comfortably more than 100% of the levy. This could provide limited protection in some cases, but will have to be reviewed on a case-by-case basis.
Broad ranging economic fallout, such as tourism declines, is also possible, although these will likely be minor, temporary, or short-term disruptions. Tourism is one of the leading industries of the region, especially San Diego County, and many Southern California cities, notably Anaheim, Los Angeles, and San Diego. Various scheduled conventions and related hotel stays could be cancelled. It's also possible there will be short-term affects on local sales taxes generated by tourism, although revenues generated from construction spending on rebuilding could help offset this decline.
As in 2003, we expect that most structures lost to the fire will be rebuilt. Although the fire-related damage thus far is significant, it does not yet appear that any individual entities have been strained to the point of credit concern. We will continue to follow the fire-related developments and their credit quality ramifications for specific entities in the region.
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