Floridaâs Bust Propels Muni Default Spike: Chart of the Day Share | Email | Print | A A A http://www.bloomberg.com/apps/news?pid=20601109&sid=ajaU9mVjI3cM By Joe Mysak Sept. 1 (Bloomberg) -- No other state comes close to Florida in defaulted municipal bonds. The CHART OF THE DAY shows the number of bond issues that have gone into default over the past decade and Floridaâs contribution to the total, according to the Distressed Debt Securities newsletter of Miami Lakes, Florida. Of the 126 bonds that are in default in 2009, 70 were sold in Florida. Blame it on the collapse of the real estate market in general and, in particular, on Community Development Districts, which sell bonds to pay for infrastructure to support new real estate developments. Florida has 600 such districts, and 105 have gone into default on a total of $3.2 billion in bonds. Asked how the so-called dirt district defaults in Florida compared with similar meltdowns in Colorado in the 1980s, Texas in the late 1980s and early 1990s and California in the 1990s, Richard Lehmann, publisher of the newsletter, said, âItâs worse than all three combined.â He also observed that some California defaults are still being worked out a decade after they occurred. Lehmann has launched a Web site devoted to this, http://www.floridacddreport.com. âThe death of Florida real estate has been reported and greatly exaggerated,â said Terry OâGrady, senior vice president of municipal trading at FMSBonds Inc. in North Miami Beach, which makes a market in Florida CDD bonds. âIf you have time to do the research properly, and can figure out which districts are going to be built out, this is a good buying opportunity.â After Florida, Ohio is second-largest with eight defaults and Illinois is third with five. The record year for municipal defaults was 2008, when 151 municipalities violated covenants on $7.9 billion in bonds. To contact the reporter on this story: Joe Mysak in New York at jmysakjr@bloomberg.net. Last Updated: September 1, 2009 06:00 EDT