MMA Independent and

Data Driven

Municipal Event Disclosure During COVID-19

www. mma-research.com

SEC Office of Municipal Securities: 

2020 Municipal Disclosure Conference

Lisa Washburn

lwashburn@mma-research.com
MMA Independent and 

Data Driven

Page 2

COVID-19 Disclosure Trends by Sector (1 of 3) 

Governments Disclosure Themes Impairment Trends - COVID-19 Related

States

-Significant impact on revenues, particularly economically sensitive taxes

-April worst month so far, declines from activity and extension of tax payments; May revenues are 

also down but a bit less so as state economies begin to reopen

-Tourism and energy economies/revenues pinched more

-Budget management information

-Information on aid/funds from increase in FMAP %, CARES Act, and FEMA

-Liquidity sources including reserves, other available funds, external liquidity, debt 

-Expense reductions (operating and capital)

-No entrants into MMA's impairment database and none expected

Local Gov'ts

-Stability in property taxes so far; longer term concerns about the impact of 

recession/unemployment on property values

-Economically sensitive taxes and fee revenue negatively impacted; narrower pledges and those 

tied to tourism/entertainment more vulnerable

-Concerns about potential for cuts in state aid

-Uncertainty about impact of behavioral changes, post-pandemic

-Expense reductions (operating and capital)

-Information on reserves and liquidity

-CARES Act funding for some; FEMA support

-No additions to MMA's database for local governments GO (and related) resulting from pandemic; 

a few new entrants for sales/special tax pledges

-Expect that could be a modest uptick in impairments in the sector, likely among borrowers that 

were weak pre-pandemic and for debt with narrower pledges of economically sensitive taxes (HOT, 

Amusement/Entertainment taxes, TIF, etc). 

Transportation Disclosure Themes Impairment Trends - COVID-19 Related

Airports

-Abrupt and sharp decline in enplanements and revenues

-Expense reductions (operating and capital)

-Information on addressing gap

-CARES Act funding

-Most report ample liquidity, securing additional facilities

-Temporary relief for concessionaires, rental car companies, and airlines

-Counterparty stress (e.g. Hertz)

-Some rebound in activity reported for May off of April lows as economy begins to reopen

-Narrower pledges (e.g. CONRAC) reported the potential for issues to emerge

-Otherwise no entrants into MMA's impairment database 

Toll Roads/Transit

-Abrupt and sharp decline in traffic/ridership

-Transit affected more severely than toll roads; passenger more than commercial traffic

-Increase in expenses (mass transit)

-Expense reductions (operating and capital)

-Information on addressing gap

-CARES Act funding

-Reporting on liquidity, draw downs, securing additional facilities, debt issuance

-Some rebound in activity reported for May off of April lows as economies reopen

-No pandemic-driven entrants into MMA's impairment database

-Possibility of a modest increase in impairments in the sector, but those are likely to be covenant 

breaches or reserve draws
MMA Independent and 

Data Driven

Page 3

COVID-19 Disclosure Trends by Sector (2 of 3) 

Healthcare Disclosure Themes Impairment Trends - COVID-19 Related

Hospitals

-Negative revenue impact from cessation of higher margin elective surgeries and 

other services

-Higher costs (labor and PPE)

-Financial market impact

-Expense reductions (operating and capital)

-Information on available liquidity, securing additional facilities

-Accessing CMS advance program

-CARES Act funding 

-As state economies reopen and elective surgeries resume, revenues are improving 

off April lows

-A small number of new entrants into MMA's database since the start of the 

pandemic

-New impairments are mainly covenant breaches, save one support draw

-Expect that new impairments will be predominantly covenant breaches and 

draws on reserves

Retirement

-Higher costs (labor and PPE)

-Lower admissions to skilled nursing because elective surgery cessation

-Some softness for independent living (virus and financial markets)

-Expense reductions

-PPP loans

-Many new entrants into MMA's impairment database since start of pandemic

-Rising impairments across all categories (default, support, other)

-Early notification of pending trouble

-Expect that impairments, including defaults, will continue to rise 

Higher Ed & Related Disclosure Themes Impairment Trends - COVID-19 Related

Higher Education & R

-Negative impact from closures and refunds for housing/dining and financial 

market volatility

-Summer revenue losses

-Concerns about fall enrollment and revenues, particularly if not back on campus

-Uncertainty about international student attendance

-Narrower pledges from auxillary revenues more challenged

-Expense reductions (operating and capital)

-Information on liquidity and bolstering cash through draws on liquidity 

facilities, obtaining additional facilities, debt issuance

-CARES Act funding

-A single addition to MMA's impairment database for a covenant issue

-More impairments expected in coming months, probably of increased severity

Student Housing

-Significant impact because of school closures and refunds

-Divergence between projects; some schools supported or backfilled refunds, 

other projects received no support

-Revenue loss for summer session

-Risk if schools do not provide in-person classes 

-Several new entrants into MMA's impairment database

-More impairments expected in coming months, likely of increasing severity 
MMA Independent and 

Data Driven

Page 4

COVID-19 Disclosure Trends by Sector (3 of 3) 

Others Sectors Disclosure Themes Impairment Trends - COVID-19 Related

Charter Schools

-No revenue impact from stay-at-home orders/pandemic, at least for now

-State funding for schools reporting remained at pre-pandemic levels

-Potential for cuts in state funding for next fiscal year

-Several additions to MMA's impairment database but for non-pandemic reasons

-Pandemic related impairments, if any, are likely to be driven by specific state 

school funding reductions 

Others

-Utilities: Modest negative impact reported by a few related to shifts in usage 

related to economic shut-down. Some concerns about potential increase for 

delinquencies/delays in payment because of downturn. Concentration to a 

particular customer or industry can be an additional risk

- Hotel/Convention Center/Stadium Related: Shuttered facilities are causing 

revenue strains

- Other Not-for-Profits: Many of these (cultural facilities, YMCA's etc.) have been 

closed because of the pandemic. Revenue and memberships have been negatively 

impacted

- Start-Up/Speculative Project Financings: Economic shutdown, reduced 

operations/demand, growing difficulties in access to capital are accelerating 

stress for these credits

-Utilities: Expect that impairments, if any, will be temporary and skew toward 

covenant breaches and draws on reserves

- Hotel/Convention Center/Stadium Related: Expect there will be rising 

impairments among these types of credits that do not benefit from governmental 

support

- Other Not-for-Profits: Expect an uptick in impairments among these types of 

credits that do not benefit from strong philanthropy

- Start-Up/Speculative Project Financings: Impairments for these types of credits 

are likely to accelerate
MMA Independent and 

Data Driven

Page 5

Municipal Borrowers Report a Growing Number of New 

Financial Obligations Amid Pandemic-Stress