Municipal Bond Forum
Underwriters determine rates
Q
I have been hearing for several years that municipalities had to increase interest rates in order to attract buyers. Is that correct?
A
James A. Klotz responds:
Bond rates are not determined by the issuer; underwriters determine the rates, based on credit quality and marketability. Municipal bonds have no problem attracting buyers. In fact, over the past decade, there has been a surge of investments in munis.
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