The Bond Buyer writes "Analysts Eye Market Access Risk". It says, "Municipal credit analysts are spending more time evaluating a risk few used to give much thought to: a municipality's loss of market access for refinancing short-term debt. The auction-rate securities crisis in 2008 reminded the $2.8 trillion municipal bond market that it is possible for investors to abruptly refuse to lend money. Most municipal borrowing does not require refinancing. But like ARS, some vehicles -- such as bond anticipation notes and variable-rate demand obligations -- force municipalities to tap the market multiple times for the same sum of borrowed money. In light of this need, analysts increasingly recognize the vulnerability of municipalities to a market freeze-out similar to the ARS collapse, and are trying to incorporate that possibility into their analyses." The piece adds, "Earlier this week, Standard & Poor's issued a request for comment on methodology for quantifying just how likely it is an issuer of Bans will be unable to tap the bond market to pay off the notes." Natalie Cohen, managing director of municipal securities research at Wells Fargo comments, "There's a correlation between better credit and market access." "She also likes to look at the overall debt profile of an issuer, to see whether too much of its debt matures in the short term," says Bond Buyer.
