Distressed Muni Prospector identifies and profiles United States entities with publicly traded municipal bonds exhibiting unique circumstances which may be indicative of early signs of strain or difficulty. This is designed to support the niche marketing programs of professional firms. Distressed Muni Prospector features municipalities that meet strictly defined predetermined criteria. Information is compiled weekly and the Muni Prospector is distributed by e-mail to arrive before 9:00 a.m. every Monday. For each municipal entity identified, the Muni Prospector provides the trigger event and enough information to assess the prospect and pursue any opportunities.
In order to appear in Distressed Muni Prospector, a municipal entity must meet one of the conditions listed below, and the entity must be at risk of distress in the opinion of the editors. In many cases, when a profiled municipal entity meets another condition, it will appear in a subsequent issue again.
- Bankruptcy. The municipal entity files a voluntary Chapter 9 bankruptcy petition.
- Default. A significant event of default is reported with respect to an entity.s obligations. Usually this will be a default in payment of principal or interest on debt.
- Distressed Exchange Offer. The municipal entity announces an exchange or tender offer for outstanding debt at a significant discount from face value.
- Restructuring. The municipal entity proposes a significant restructuring of its obligations.
- Maturing Obligation. An obligation issued by the municipal entity is maturing within the next 365 days and is trading with an above-average yield.
- Debt at Deep Discount. The municipal entity's public debt trades with a current yield or yield-to-maturity in excess of the lower of 7% or 100 basis points over peer debt with a comparable rating and maturity.
- Debt Yield Spike. The municipal entity's public debt trades with a current yield or yield-to-maturity at least 1% higher than the recent reported trades prior to the current week.
- Low Rating. The municipal entity's public debt is downgraded (or new rating is set) by a major rating agency to or below a level indicating a "current vulnerability to default," such as Standard & Poor's B rating.
- Covenant Problems. The entity violates or indicates that it is likely to violate covenants in its debt agreements.
- Low Investor Demand. The entity.s auction rate securities have a bid-to-cover ratio of less than 1.00 excluding bonds purchased by inter-dealer brokers as reported by the Municipal Securities Rulemaking Board.
- Elevated Auction Rate. Following the most recent auction, the entity.s auction rate securities trade with a yield at or close to of the maximum allowed under the issue.s indentures.
- Miscellaneous. Some other event occurs or is reported which, in the opinion of the editors, indicates that the entity may be in or approaching financial distress or otherwise raises doubts about the future prospects of the timely repayment of debt obligations.
Issues: Weekly. All subscriptions continue until canceled.
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Distressed Muni Prospector is published by Beard Group, Inc., P.O. Box 40915, Washington, D.C. 20016
