The Bond Buyer
A city in Virginia stands behind its unwillingness to repay bonds
Buena Vista’s “selective payment default on its $9.2 million ACA-wrapped lease-revenue bonds is perhaps a worst-in-class example of erosion in issuer willingness to pay bondholders,” municipal analyst Matt Fabian, a partner at Municipal Market Analytics, said in his March 5 Weekly Outlook column.
“Buena Vista’s default can no longer be blamed on weak local budget or economic conditions,” Fabian said. “Rather, the city is currently choosing neither to pay nor negotiate with bondholders because the pledged appropriation security permits this to occur.”
The decision sets the stage for an unnecessary confrontation with lenders, he added.