Why Municipal Bond Research is Now Critical

Friday, May 24, 2013


Remember the good old days? You would purchase primarily “insured” municipal bonds with AA credit ratings, put your municipal bond portfolio on auto pilot, and move on. And how did that work out? The majority of monoline municipal bond insurers did well, as long as there weren’t significant claims. Once claims began, including claims resulting from their entrance into insuring mortgage-backed security (MBS) deals, the majority ran for bankruptcy protection or had their own credit ratings cut to a level where they were effectively not able to write new business.

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