DALLAS -- Flood damage does not appear to be extensive in many municipalities in southeastern Texas, and is not expected to prompt downgrades of regional municipal bond ratings in the near term, analysts said.
"It's really not that bad," said Chris Evangel, supervisor of the southwest region for Moody's Investors Service. "The Municipal Utility Districts are potentially the most vulnerable."
Rating analysts said most reported damage stemmed from flooded homes in the Houston area, and that overall damage to public infrastructure and facilities appeared minimal, although information was still being collected.
Some municipalities "had significant damage, but most is covered by insurance -- either through the Federal Emergency Management Agency or private insurance," said Standard & Poor's Corp. director Sharon Gigante.
Total damage estimates are still not available, as state and municipal officials continue to survey the damage in the 38 counties designated as federal disaster areas, following the floods that inundated the region in late October.
Jo Schweikard Moss, spokeswoman for the state's division of emergency management, said 25 of the 38 counties declared disaster areas would be eligible for public as well as individual assistance.
About 30,000 individuals have applied for home or other property assistance, with people in Harris, Montgomery, and Liberty counties the hardest hit, she said.
She said damage estimates were being made on roads, bridges, schools, and other public infrastructure and facilities, and could be released in the next several weeks. "A lot of them need the money rapidly," she said.
However, rating analysts said the damage appeared to be financially manageable, and historically, natural disasters don't result in bond rating downgrades.
Wayne Newman, an associate director at Standard and Poor's, said no flood damage of $1 million or more has been reported in the school districts that his firm rates, and few public facilities were heavily affected.
Amy Doppelt, senior director at Fitch Investors Service, agreed that the floods are not expected to put pressure on regional bond ratings. "We don't see any rating implications," she said.
At Moody's Investors Service, senior analyst Mary Francoeur said Houston-area municipal utility districts that she toured could probably withstand the financial pressure from repairing flood damage. "The MUDS are small and vulnerable, and there is potential loss of property value," she said. But, "the MUDS are well-managed, and they have cash on hand," she added.
In addition, she said much damage should be covered through the Federal Emergency Management Agency.
Although the preliminary indications of damage are not as severe as some expected, analysts said more damage reports could surface later. For example, Newman said damage to building and road foundations could be discovered.
Full examination of regional credits will be completed when all the reports are in, analysts said.
