Disclosure to municipal bond investors of material risks stemming from the coronavirus outbreak presents a serious concern in the municipal securities industry. This is particularly true in certain sectors, including bonds for:

  • senior living: independent, assisted, continuing care, and skilled nursing facilities;
  • hospitals and health systems;
  • education facilities: student housing, academic buildings, and others;
  • Other “campus-style” facilities, including multifamily and military housing;
  • airports and related facilities, including concessions and parking;
  • intercity rail and public transit facilities;
  • tourism-dependent facilities: convention centers, resorts, theme parks, cruise terminals, and museums;
  • tax-backed government bonds for states and municipalities that rely on tourism and conventions: Hawaii, Las Vegas, Orlando, etc.; and
  • manufacturing facilities dependent on international supply chains.
Our Public Finance Group provides guidance on securities disclosure and related issues. These include possible application of Force Majeure clauses to excuse performance and supplemental COVID-specific questions during due diligence. We also advise on practical transactional considerations in light of potential revenue declines, expense increases, economic recession, and cancellations of conferences and face-to-face meetings.

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