Bloomberg
Muni Market Niche Faces Biggest Test With Sales Taxes Crumbling
Matt Fabian, an analyst for Municipal Market Analytics, said the sales-tax bonds were designed to be insulated from the state and city budgets, with the revenue behind them typically well above what’s needed to cover the debt payments.“But sales tax bonds weren’t built with the pandemic in mind,” Fabian said. “You can’t have sales transactions go down 80% for months without problems.”The risk hasn’t yet had a big effect on the price of the securities, which have rebounded along with the broader market from the March crash triggered by the first wave of shutdowns.