KBRA also reviews the terms of the general obligation unlimited ad valorem tax bonds (“GO ULT”) settlement in Detroit Michigan’s Chapter 9 proceeding including the uncertainties that surround its eventual implementation. The general obligation limited ad valorem tax bonds (“GO LT”) settlement of
As noted in KBRA’s Financial Guaranty Rating Methodology, “Guarantors that are pro-active in addressing potential risks in the insured portfolio and who use their rights in the transaction and insurance documents to minimize losses or increase recoveries will be viewed positively.” KBRA will continue to review these developments as part of our rating and surveillance process.
It is KBRA’s view that defaults in the municipal market will continue to be idiosyncratic and will likely show loss rates that are elevated from historical experience but not systemic. For that reason KBRA believes that municipal bond investors will be more likely to consider the value of bond insurance when analyzing the prospect of unpredictable losses that could result from higher levels of uncertainty.
To view the report, please visit www.krollbondratings.com.
KBRA was established in 2010 by
Senior Managing Director
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