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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
|
2.96% |
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S&P New York Bond Index
|
3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
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
|
848.03 |
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S&P U.S. Preferred Stock Index (CAD)
|
636.26 |
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S&P U.S. Preferred Stock Index (TR)
|
1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
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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Kroll Bond Rating Agency Report Finds US Municipal Bonds Safe from Default Risk
"An Analysis of Historical Municipal Bond Defaults" Challenges Recent Assertions about Municipal Defaults |
MarketWatch - Nov. 14, 2011 - by Business Wire
NEW YORK, Nov 14, 2011 (BUSINESS WIRE) -- Kroll Bond Rating Agency (KBRA) has released a groundbreaking study of municipal bond defaults from the Great Depression to today that concludes that there will not be a material increase in municipal defaults over the medium term.
The study, An Analysis of Historical Municipal Bond Defaults, draws on data from more than 8,500 municipal bond defaults occurring during the period between 1929 and 2010. The study examines the causes of the massive wave of pre-war defaults and applies historical lessons to today's environment.
KBRA will incorporate into its methodologies the lessons learned from the Municipal Default Study and will address the on-going challenges facing the municipal market. Its methodologies will include and focus on the ability of a municipality to effectively navigate increasing expenditures on social services, fluctuating revenues, an expected decrease in federal stimulus spending, longterm pension obligations and the need for increased infrastructure spending.
"Market volatility over the past three years has led some to question the fundamental credit worthiness of the U.S. municipal bond market and to predict a wave of upcoming defaults," said KBRA President, Jim Nadler. "Our study finds that widespread municipal bond defaults have not been a feature of the most recent downturn and we do not expect a sharp increase in defaults over the foreseeable future."
The analysis identifies several important structural differences between the municipal bond market of the 1920's and today's municipal bond market. During the Great Depression, rapid growth in the volume of municipal bonds was spurred by the inception of the personal income tax, demand for paved roads accompanying the popularization of automobile travel and the relaxation of World War I controls on issuance. As this research shows, because the majority of Depression-era conditions do not apply to today -- and have not applied for some time -- municipal bonds are significantly safer than some commentators have reported.
"The legacy rating agencies have misread history and have yet to adjust their methodologies to account for recent structural changes in the municipal bond market," said Jerome Fons, KBRA Executive Vice President and co-author of the report.
Other key findings of the report include:
-- Prior to World War II, the municipal bond market consisted mainly of issuances by states and cities.
-- By a wide margin, the largest contributors to municipal defaults during the Great Depression were U.S. cities. In terms of number of defaults, school districts came in second place, with counties, agricultural projects and municipal special assessment districts also contributing large dollar volumes.
For the complete article.
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