Over 500 coronavirus-related continuing disclosures were submitted to the Municipal Securities Rulemaking Board since the beginning of 2020.
Those numbers came out of the inaugural weekly report from the MSRB on Thursday. From Jan. 1 to March 30, the MSRB’s EMMA system received 506 COVID-19 related disclosures out of 43,667 total continuing disclosures. Continuing disclosures are provided to the market on an ongoing basis.
Most of the total disclosures were from March, said Brian Anthony, MSRB director of data strategy and management.
“Even though we did a look back to January, most of those are from March,” Anthony said. “To ramp up from zero to that many I think is interesting.”
Anthony also expects more disclosures in the next few months.
“I would imagine the trend would continue up, but that’s something that we’ll certainly be able to monitor,” Anthony later said.
So far, COVID-19 has affected more than 200,000 people in the U.S. and killed more than 5,000, according to media reports. Many states have responded to the pandemic by issuing stay at home orders to stop the spread of the disease. Municipalities face revenue losses as they grapple with the virus’ economic impact of reduced consumer spending.
The MSRB plans to publish its new disclosure summary on a weekly basis. The board recently began publishing daily data summaries every morning to track trade activity.
Under Securities and Exchange Commission Rule 15c2-12, dealers have to ensure that issuers enter into an agreement to provide certain information to the MSRB on an ongoing basis. Among those are events such as rating changes, bankruptcy and unscheduled draws on debt service reserves reflecting financial difficulties.
Out of 206 event-based disclosures, 132 were filed in the "other event-based disclosures" category.
The MSRB said they were not surprised to see many filing in the “other” category. The MSRB has said if the disclosure doesn’t fit into one of the Rule 15c2-12 categories, then the EMMA system is flexible to let participants decide where they want to file.
Rating changes made up 54 of event-based disclosures.
“Our hope is that by putting out this information, everyone can see how it’s being categorized, so maybe we’ll see some coalescing in the industry around more of a common approach to tackling this issue,” the MSRB said.
The MSRB also pulled the data of which states had the most COVID-19 primary market and continuing disclosures. Unsurprisingly, the list was led by large states with large debt portfolios.
California had the most with 97 total COVID-19 disclosures, with 76 being continuing disclosure.
Texas and New York tied with 71 total COVID-19 disclosures.
There were 300 total COVID-19 annual financial disclosures. Of those, 131 disclosures were filed under annual information and operating data.
The EMMA system also received 125 COVID-19 primary market disclosures out of 2,548 total primary market disclosures. Of those, 113 were in official statements and 11 in preliminary official statements.
Some market participants expect to see more disclosures in the next several months specifically rating changes and draw downs on reserves.
Some market participants have also said bankruptcy is likely for some municipal issuers.
