Add the municipal market to the long list of American institutions reshaped by Covid-19. The pandemic is threatening the creditworthiness of many municipal securities long seen as safe investments—bonds for higher education, health care, tourism and travel. … Municipal bond defaults have reached their highest rate since 2011, the aftermath of the last recession, according to Municipal Market Analytics data. Still, Americans continue to pour money into municipal bond mutual funds, which are clocking 17 straight weeks of inflows since mid-May.
Source: Wall Street Journal.

U.S. Department of Agriculture (USDA) Rural Development State Director for Kansas Lynne Hinrichsen today announced that USDA is investing $265,300 to renovate a community center in the city of Lucas. “Modern, safe community infrastructure is essential for rural communities to thrive,” Hinrichsen said. “Whether it’s a safe and accessible library or facilities for public and civic meetings, rural communities rely on modern infrastructure to invigorate and serve their town and public. Under the leadership of Agriculture Secretary Sonny Perdue and Deputy Under Secretary for Rural Development Bette Brand, USDA is dedicated to rural communities like Lucas and their long-term commitments to economic prosperity; because when rural America prospers, all of America prospers.”

The city of Lucas will use a $222,300 loan and a $43,000 grant to purchase and renovate an existing vacant building to house a community center, public library, municipal offices, wellness equipment, and recreation room for public meetings and events. The library is currently housed in a building constructed in 1920 with deteriorating floors, limited space for children’s activities and patron privacy, and is not accommodating to individuals with disabilities. The existing municipal space is experiencing similar issues. The new facility will provide infrastructure for disabled individuals, larger spaces for privacy and security and a communal space for the nearly 400 residents of Lucas.

Today’s investment is in coordination with the recent announcement by Deputy Under Secretary Brand that USDA is funding 44 projects in the following states: Colorado, Georgia, Kansas, Kentucky, Maine, North Carolina, Nevada, New York, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas, Tennessee, Virginia and Wisconsin.

The interest rate table above illustrates recent changes in a sample of MBIS “investment grade” yields. Every issuer’s credit is different. For rates that may be applicable to your municipality, contact our Municipal Bond Advisors, Larry Kleeman and Beth Warren.