Climate risk has become increasingly prevalent in this bond market, where states and cities raise money for infrastructure projects such as schools, roads and bridges.
Hawaii state and local municipal bonds have surrendered all their 2023 gains in the past three weeks after thedelivered a fresh reminder of climate risk in the $US4 trillion market for state and local debt.
Ratings agency Fitch said the scope of damage from the fires was still in flux and would probably be “substantial.”“The Hawaii index was impacted by the large drop of bonds associated with the Maui catastrophe,” said Tom Doe, president and founder of Municipal Market Analytics.
Mr Goode also noted that the Hawaiian Electric bonds were a small part of the state index and the performance was also affected by the macro-rate environment and decline in bond prices broadly. The index contains debt sold by a variety of Hawaii issuers such as airports, municipalities and universities.The state is assessing the wildfire damage and evaluating the wide-ranging effect the event will have on its property and citizens.
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