Municipal Bond Forum
Hospital, airport, utility bonds
Q
I have a lot of munis that are not associated with a municipality, such as hospitals, airports and utilities. Do these bonds have the same low default rate as “real ” munis, or are they really corporate bonds in sheep’s clothing?
A
James A. Klotz responds:
The types of bonds you describe enjoy a similar track record of default, if they are rated securities. These bonds, however, need to be analyzed by examining the revenue stream that supports each individual issue.
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