The $3.8 trillion market for funding state and local governments, airports, schools and hospitals faces a test this week as New York City’s transit agency offers bonds to the market for the first time since the coronavirus emptied its subways, trains and buses.
Investing in the roughly $900 million offering from the Metropolitan Transportation Authority will be a leap of faith on the part of investors who will will have to imagine a healthier, post-shutdown New York economy, where commuters return to work, students go back to school and tourists come to see Broadway shows again.
That’s the same story for many issuers, as states and cities grapple with how to fill a sudden budget hole and move forward, in an environment of uncertainty about what the economic rebound will look like and how it will impact future revenues.
(Read more: Bonds)
