AMERICAS DISTRESS DAILY: Muni Bond Defaults Near 12-Year High

Bonds Issued for riskier municipal projects such as charter schools and small colleges are showing signs of distress as pandemic aid dries up and inflation raises costs. This year, 46 borrowers have become impaired, nearing a 12-year record.

• Charter schools are particularly vulnerable to financial strain due to their reliance on per-pupil funding and lack of access to local tax funding for facilities, making it difficult for them to cope with inflation.
• Colleges are also facing financial pressure due to inflationary pressures and a dwindling pool of students, with some institutions needing to tap into debt service reserve funds to ...