The recent California wildfires highlight the critical need for vigilance in safeguarding municipal bond investments. Wildfires can lead to significant revenue disruptions, increased recovery and infrastructure costs, and potential credit downgrades or defaults - risks that municipal bond investors must not overlook.
At Asset Preservation Advisors, we actively monitor and evaluate municipal bond exposure to natural disasters, such as the ongoing Los Angeles wildfires. Our proactive approach works to ensure that potential risks are identified early, enabling us to mitigate disruptions and protect your investments. Our credit research group integrates data and analysis on natural disasters, including wildfire risks, into our credit monitoring process. By identifying issuers most susceptible to these risks, we proactively assess the impact on credit quality and long-term financial stability. While defaults directly linked to wildfires are rare, the cascading financial pressures they cause can heighten vulnerability, especially for smaller issuers with limited reserves.
APA is committed to providing timely insights into our portfolio management process to help you remain aligned with your financial goals. If you have concerns about how wildfires might impact your client portfolio, please contact us, we are glad to provide any information that may be helpful in your discussions.
This material is not financial advice or an offer to sell any product. APA is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about the advisor including its investment strategies and objectives can be obtained by visiting www.assetpreservationadvisors.com. APA-2501-17