Los Angeles municipal bondholders will not face payment disruptions despite ongoing wildfires, according to PIMCO, a major U.S. bond fund manager.
The wildfires, which started on January 7, have caused massive damage, but PIMCO expects the financial impact to be manageable. The firm, which manages $2 trillion, believes that LA’s strong financial position will help absorb the losses.
PIMCO stated that Los Angeles city, county, school districts, and the state of California have the financial strength to manage the crisis. Key reasons include:
While most local governments are financially stable, the Los Angeles Department of Water and Power (LADWP) is facing difficulties.
LADWP has not yet responded to the situation.
Despite these concerns, PIMCO reassured investors that Los Angeles bonds remain safe, and payments will continue without issue.