The August 2023 wildfires on the island of Maui in Hawaii killed at least 115 people, with another 388 individuals unaccounted for. Damage caused by the fire is estimated at almost $6 billion. APA’s research group includes climate risk in their review of the underlying credit while also monitoring the widespread impacts of natural disasters.

In light of the recent collapse of Signature Bank and Silicon Valley Bank, the uncertainty surrounding regional banks, and a potential looming recession, a rally in the US Treasury Market has taken place as investors seek safe assets.

Taxable municipal securities are bonds issued by state and local governments for projects that do not meet the IRS's public use tests to qualify for federal subsidization through tax exemption.

The pandemic caused a 1.4 million job loss in the public sector, with a $46 billion decline in tax revenue for the year ending June 30, 2020. States had to cut spending or use rainy day funds to balance budgets. In response, President Biden and Congress passed the American Rescue Plan, providing $350 billion in aid to state and local governments.

Recently published articles have shed light on specific credit quality concerns within the municipal bond market as the economic impacts of the pandemic have become more apparent.

The unfathomable effects of the COVID-19 crisis on Americans’ physical and fiscal health have generated unprecedented market adjustments, including short-term negative pricing of crude oil futures, and deep declines in key interest rates to record lows.

The broad sweeping impacts of the COVID-19 crisis have certainly taken their toll on consumer sentiment and behavior.

Many cities and states face significant financial challenges ahead from the effects of the COVID-19 pandemic. APA believes that professional portfolio management and an ongoing credit-review process can help minimize investors’ risk.