MUNICIPAL BOND DEFAULTS FULL
MUNICIPAL BOND DEFAULTS DOWNLOAD

Income from certain Municipal Bonds may be subject to the Federal Alternative Minimum Tax.DEFAULT (15 Dec. Past performance does not guarantee future returns. ** Municipal Securities Rule Making Board WebsiteĪll investments involve risk, including loss of principal. * Source: Moody’s Investor Service, Aug“US Municipal Bond Defaults and Recoveries, 1970–2018.”

MUNICIPAL BOND DEFAULTS DOWNLOAD

To get more detailed information about the benefits and risks associated with investing in municipal bonds, please download our free bond guide, or call us at (800) 836-8240 to speak to one of our representatives. If you sell your bonds prior to maturity, you will receive the current market price, which may be more or less than the original cost. Municipal bonds are sold in the over-the-counter market instead of an organized exchange.

Holders of municipal bonds can sell their bonds in the secondary market through one of the many banks and securities dealer firms which are registered to buy and sell municipal securities. According to Moody’s 2019 research,* default rates are historically low for the rated investment-grade bonds favored by Hennion & Walsh. Because most bonds have call options, which means you get your principal back before the maturity date, subsequent municipal bonds you purchase can earn more or less interest than the called bond. That means that you can count on a regular, predictable income stream. Municipal bonds typically pay interest every six months unless they get called or default. As a general rule, the higher the income tax bracket, the more investors benefit from tax-free municipal bonds.

Depending on the place of issue and place of residence of individual investors, interest on municipal bonds can also be exempt from State and local taxes. Potential Tax-Free IncomeĪll municipal bonds pay interest that is exempt from federal income taxes. As long as they exist, municipalities should be able to generate tax revenue sufficient to meet their obligations to bondholders. General Obligation Bonds thus offer a measure of safety to bondholders because unlike corporations, local governments rarely cease to exist and dissolve altogether. income, property, sales, and vehicle taxes, tolls, special levies, etc.) of an issuer** to pay back the principal and interest owed to bondholders.

MUNICIPAL BOND DEFAULTS FULL

Such bonds are referred to as a “General Obligation Bond” (or “GO”), and are backed by the full faith, credit and taxing power (i.e. In August of 2019, Moody’s published research that showed that rated investment-grade municipal bonds had an average cumulative 10-year default rate of just 0.10% between 19.* The reason for this low historical rate of default is that many municipal bonds are backed by the unlimited taxing power of the local government issuing them. This is important because many investors, particularly those nearing retirement or in retirement, are concerned about protecting their principal. When investing in municipal bonds, investors are paid back the full face value of their investment at maturity or earlier if called, unless the bond defaults. Municipal bonds typically provide the following benefits to investors: Potential Safety of Principal

Municipal bond defaults