Harrisburg's filing hasn't affected bond prices of other Keystone state issuers. Investors realize that the problems faced by the capital city are unusual and that the state is proactive in addressing financially distressed municipalities, said Alan Schankel, director of fixed-income research at Janney Montgomery Scott LLC in Philadelphia.
"We haven't seen any negative impact," Schankel said.
In fact, the filing may help bondholders by pushing the state legislature next week to approve legislation that would allow a state takeover of Harrisburg, Schankel said.
Bonds
Some Harrisburg general obligation bonds traded at higher prices to yesterday and weeks earlier, according to data compiled by Bloomberg. A zero coupon bond maturing in 2014 traded today at an average price of 80.856 cents on the dollar up from 78.525 yesterday.
Assured Guaranty's "net par exposure" to Harrisburg is $252.8 million including incinerator debt and debt issued by the parking and redevelopment authorities, spokeswoman Ashweeta Durani said in an e-mail.
The case is In Re: City of Harrisburg, 11-06938, U.S. Bankruptcy Court, Middle District of Pennsylvania (Harrisburg.)