Series 52: 5.1.2. Nature Of Issuer’s Debt

5.1.2. Nature of Issuer’s Debt

The state of a municipality’s debt is another important indicator of credit risk. Some questions to consider:

• How diversified is the source of tax revenue, and how great is the current tax burden on the community?

• What sources of new debt are on the horizon to erode the creditworthiness of existing debt, and how high is the debt burden in relation to its debt limit, if it has one?

• If the municipality’s debt is approaching its statutory limit, what flexibility does i