Paradise, Calif., The town destroyed by the 2018 Camp Fire, said it was on the verge of default, raising concerns among municipal bond investors about how a warming planet is rising add risk to their $4 trillion market.
A power line is down set fire, stretching through forested hills dried up by a prolonged drought. The town received $219 million in settlement from the utility PG&E Corporation in 2020, but Paradise recently revealed to bondholders that it “cannot make any guarantees” that it will repay about $5 million that one of its agencies has borrowed over the years. before. The agency’s cash is running low, and local officials have set aside settlement funds for reconstruction, not debt repayment. S&P Global Ratings lowered the bond’s rating six places to 3 C in June, pushing it deeper into junk territory.
