Florida mining company Mineral Development, LLC defaulted on $85 million of outstanding industrial development bonds at the start of the year, the first municipal default of the new year, according to Municipal Market Analytics' Default Trends.
Mineral Development failed to provide $7.48 million in principal and $2.51 million in interest due to the bond trustee, UMB Bank, N.A., on Jan. 1, according to a posting on the MSRB's EMMA web site.
The Series 2020 bonds were issued in October 2020 from the Polk County Industrial Development Authority. The $90 million of bonds carried a yield to maturity of 5.875% and a final maturity of January 2033.
The bonds were unrated and the issuer didn't post an official statement on EMMA.
Mineral Development announced it projected it would have insufficient coverage for its debt service payments in November 2023.
Mineral Development drew on its debt service reserve to make a payment in early 2024.
It drew on debt service reserves again in July despite earlier in the year selling an additional $16 million equity to existing owners.
Mineral Development specializes in reactivating abandoned mining sites and mining them for different minerals, primarily phosphate.
It told bond investors in June 2024 that its weekly production levels in May and June were ranging from about equal to about double the peak weekly levels of May to September of 2023.
Chris Berg, CFO of Mineral Development, didn't respond to email inquiries. The Polk County government attorney's office didn't respond to a request for a comment. The bond trustee also didn't respond to an inquiry.
MMA also noted the state with the largest number of defaulting borrowers in 2024 was Florida, with nine defaulters. Three defaulting borrowers had multifamily housing project bonds, two were charter school bonds, two were land-secured bonds, and two were outstanding continuing care retirement community bonds. Florida is the third largest state in population and the fourth largest in terms of economic size.
"Florida tends to have more risky sector defaults than in other states because it has had some of the fastest growth (which attracts investment, sometimes too much) and has also seen a sharp rise in costs related to property and development like insurance, labor, supplies, etc.," MMA Partner Matt Fabian said.
