Detroit bankruptcy wipes at least $13.8B from muni bond market

|By:, SA News Editor

The Detroit bankruptcy has sucked at least $13.8B from the muni bond market, based on the S&P Municipal Bond Index - the number likely is higher, since the index doesn't track all of the $3.7T market - as headlines about distress and defaults begin to weigh on investors.

Latest casualty in Detroit's wake: Michigan's Saginaw County postponed a $60M bond offering scheduled for today.

But investors could consider sewer bonds, backed by the revenues of the system and likely more safe in a bankruptcy reorganization, in contrast to the unsecured debt Detroit’s emergency manager wants to wipe out.

Muni ETFs: MUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, SUB, GMMB, SMMU