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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Muni Bond Ratings Rise Despite Finances |
SMARTMONEY MAGAZINE - June 30, 2010 - by Elizabeth O'Brien
Of course investors are scratching their heads. Across the country, states and localities are wrestling with massive revenue shortfalls—laying off employees and fending off creditors. So why, at the same time, are municipal bond grades being revised...upward?
This spring two big bond-rating agencies raised the grades on thousands of bonds that make up the nearly $3 trillion muni market. But don’t call these upgrades, say experts. Rather than being prompted by changes in the bond issuers’ underlying strength, the agencies say, the new ratings are part of an effort to evaluate muni bonds on the same terms as their corporate counterparts. For decades Fitch Ratings and Moody’s Investors Service had applied a different set of criteria to the municipal bonds they rated. Because munis historically run into trouble far less frequently than corporates (the historical five-year default rate for investment-grade municipal bonds is 0.03 percent, compared with 0.97 percent for corporate bonds), the new ratings have resulted in municipal grades getting bumped up a notch or two.
Never mind that California’s budget woes have made national headlines; Moody’s recently upped the Golden State’s debt rating three notches (to A1), while Fitch raised its rating two notches (to A-minus). Experts say the revisions helped increase demand this spring for California bonds, whose prices rose and yields fell. “Psychologically, it brought more people in,” says Kathleen McNamara, municipal bond strategist for UBS Wealth Management Research Americas.
The biggest impact of the revisions, experts say, could be on the taxable Build America Bonds, launched last year. The revisions will likely make investors—who had previously demanded higher interest rates before buying the new, somewhat unfamiliar products—more comfortable with the bonds, pushing their prices up and yields down. The problem is, there are a lot more bonds with higher grades, so the letter grade isn’t as useful for telling them apart, says Hugh McGuirk, head of municipal bonds at T. Rowe Price. Bottom line for investors: It’s still important to do your homework before investing in muni bonds or bond funds.
Read more: Muni Bond Ratings Rise Despite Finances - Investing - Bonds - SmartMoney.com http://www.smartmoney.com/investing/bonds/muni-bond-ratings-rise-despite-finances/#ixzz0sMNphju9
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