Local communities that enjoyed stability from nearby military installations after the 2008 recession are facing the reality that those bases are not immune from Congressional austerity measures designed to shrink federal government.
With the U.S. Army’s announcement of plans to reduce the ranks by 40,000 soldiers, or about 8% of the active force, local leaders last week began to assess the impact on individual posts. About 17,000 civilian jobs will also be eliminated over the next three years.
For the bond industry, the most immediate concern is likely to focus on taxable bonds used to finance privatized military housing since 1997. Today there are 205,000 privatized military housing units, mostly apartments and townhouses but also single-family homes.
Ratings analysts said they are studying the issue, with reports on the credit impact possible later in the week. Generally, however, ratings have held up through the […]