Perspectives Blog

Columbia Management Municipal Investment Team,


Detroit and Stockton are game changers for municipalities in fiscal distress

Columbia Management Municipal Investment Team, | December 22, 2014

Contrary to past experience and conventional wisdom, general obligation bonds are not sacrosanct and very low recovery rates are possible. Pensioners and other politically favored classes are likely to be treated more kindly than bondholders. Chapter 9 bankruptcy appears to be ineffective at addressing underfunded pension liabilities and will likely remain a rarely used option.