Municipal Bond Forum
Beware of tobacco bonds rated below investment grade
Q
In your article, “Clouds Darkening for Tobacco Bonds,” you don’t mention the status of tobacco bonds that are insured. I have California tobacco bonds insured by BHAC. Should I be concerned?
A
James A. Klotz responds:
Your state-enhanced BHAC-insured California tobacco bonds should not be confused with those referred to in our commentary. Your bonds carry high investment grade ratings by Moody’s and Standard & Poor’s (Aa1/AA+).
Our message is aimed at investors holding tobacco bonds that have been downgraded below “investment grade,” particularly if their investment objectives do not include speculation.
Start here.
Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.
The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.