Individual investors who own municipal bond funds could have some exposure to Detroit bonds. But many municipal bond funds are diversified and hold bonds from various communities. Many bond fund experts have been well aware of Detroit’s financial troubles for quite some time, and some have said they expect Detroit to default on some outstanding bonds in the future.
Detroit has $8 billion in bonds outstanding, but $5.4 billion are revenue bonds that should be insulated from a reorganization of Detroit’s debt, according to a report by AllianceBernstein. These revenue bonds were issued by the water and sewage systems and are secured by their revenues, the report noted. “Even if Detroit files for Chapter 9, we believe these bondholders (water and sewer) should continue to be paid,” according to AllianceBernstein.
Sort this list of which muni bond funds hold Detroit bonds by clicking the column headings.
If the table below does not work, click here for a PDF version: List muni bond funds holding Detroit bonds-By Susan Tompor-Detroit Free Press-Jun. 13, 2013
Note: The dates for the total market value of Detroit issues may vary based on what is reported to Morningstar. Dates would likely be within the last three months but could be as long ago as six months.
Source: Morningstar, Inc.