U.S. localities are defaulting at the slowest rate in three years, showing that three California municipalities' decisions to file for bankruptcy protection within two weeks is not a sign of wider stress in the tax-exempt market, Bloomberg News reported yesterday. One hundred municipal issuers defaulted nationwide for the first time in the year through July 10, the least in a 12-month period since Concord, Mass.-based Municipal Market Advisers began collecting the data in 2009. The decline is counter to the "hundreds of billions of dollars" of defaults that banking analyst Meredith Whitney projected in 2010. The drop also signals that the finances of issuers in the $3.7 trillion market are improving three years after the end of the longest recession since the 1930s.
