Municipal Bonds: Credit Analysis

At David Lerner Associates, each and every bond goes through vigorous credit analysis by our Trading Department staffed by traders with a wealth of knowledge and experience.

Since 1940, there have been over 600,000 new municipal issues, and of those the default figures were less then 1%. That number includes defaults by non-rated, non-investment grade or downgraded issuers as well as municipal bond defaults secured by corporate entities that have issued debt through tax-free conduits.

While historically public purpose tax-free municipal bonds have an exceptional record of paying interest and principal at maturity, investors must be aware that if they elect to sell the bond before maturity, depending on current interest rates, changes in credit status, and market conditions the principal value of that bond could be more, less, or the same as the original purchase price.

98.78% of Municipal Bonds Paid as Promised
1940 through 12/31/2018


3.5 x 5 in

Learn more about credit ratings and municipal bonds in our classroom >>


Sources: Standard & Poor’s, Bond Market Association, Bond Buyer 2004 Yearbook (Thomson Financial). Investors should consult with their investment counselor as to the rating, credit risk or risk of default with a particular issuer.

There are risks inherent in investing. Past performance is no guarantee of future results.