The persistence of the pandemic is dealing a fresh financial hit to corners of the municipal-bond market. As the strength of the tourism revival is restrained by the surge in the delta variant, S&P Global Ratings this month downgraded bonds partly backed by hotel-room revenue in Anaheim, Calif., the home of Disneyland, Bloomberg News reported. Bonds issued for New York’s Jacob K. Javits Convention Center had their rating cut by Moody’s Investors Service, with the trade association business plunged back into uncertainty. And Fitch Ratings knocked down its grade of the subway system serving San Francisco, the tech industry hub where companies have been kicking back the timeline for returning to the office. The pockets of stress stand in contrast to the rest of the $4 trillion municipal-securities market, where most borrowers have been recovering from the pandemic’s toll along with the economy. States, local governments and public transportation systems also received an unprecedented infusion of aid under President Joe Biden’s rescue plan. But the impact of the delta variant, which dashed hopes for a swift return to normal life after the rollout of the vaccine, has continued to weigh on segments of the economy, particularly those tied to business travel, commuting and tourism. That can affect agencies that sold bonds backed by revenue from hotels, convention centers and leisure activities, among others.
