NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases commentary on nationwide sales tax collections, which are being depressed by the economic fallout from the actions intended to contain the coronavirus (COVID-19) pandemic.
The cessation of economic activity has had a particularly harsh effect on the types of transactions that ultimately secure many municipal bonds. While last week’s release of government data showed U.S. retail sales fell only 8.7% in March, KBRA notes that the reporting period reflects just two weeks of the ongoing economic shutdown and that the tremendous growth in groceries and other consumer staples (which are often taxed less) mask the severity of decline for other items. In KBRA’s opinion, we believe the magnitude of sales tax revenue declines will be significantly higher than last week’s headline numbers. Furthermore, the severity and duration of the decline is unclear, including regional variations across different categories of taxable sales in the intermediate term.
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe Limited is located at 6-8 College Green, Dublin 2, Ireland.
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