Tempest in a Teacup: BofA ML Reports On Municipal Default and Bankruptcy Totals

Default watch: Year-to-date through 19 September 2012, $1.69bn in total outstanding par value of municipal bonds have entered into debt service payment default for the first time. Muni bonds in monetary default represent 0.65% of total issuance YTD and 0.045% of total munis outstanding, compared with 0.84% and 0.065%, respectively, for the full year 2011.

Bankruptcy watch: There have been nine Chapter 9 filings year-to-date through 17 September 2012. Although each municipal bankruptcy proceeding has a life and time of its own, the pre-pendency plan is becoming that much more important. In the case of San Bernardino, the plan frames what the remaining important considerations will be.


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