Water Scarcity a Bond Risk, Study Warns

``The municipal bonds that help finance a major portion of the nation’s water supply may be riskier than investors realize because their credit ratings do not adequately reflect the growing risks of water shortages and legal battles over water supplies, according to a new study... The report implicitly echoed criticisms leveled at the ratings agencies after the collapse of the subprime mortgage market in 2008, and for similar reasons. Just as mortgage ratings reflected historical patterns but didn’t capture recent market changes, water bond ratings tend to reflect a past when water was plentiful, and not a future when supplies of fresh water may be less abundant, the study noted.''