Here are a few answers to the most frequently-asked questions about municipal bonds.

Curious as to what a ‘AAA’ or ‘BB’ rating on a bond actually means? View detailed descriptions of what constitutes each of S&P’s ratings here.

A recent research report on welling@weeden casts an ominous shadow over the municipal bond market.

Aaa1 to Caa3. This is a list of definitions for ratings provided by Moody’s for municipal bonds in the United States.

This Moody’s study, released in 2002, examines historic default rates among all Moody’s-rated municipal bonds between 1970-2000. A breakdown of Moody’s rating scale is also included.

The primary concern of all bond investors is whether they will ultimately get their money back. This is especially the case with municipal bond investors: Municipal bond investors willingly accept lower yields compared to other fixed income investments primarily due to the safety record of municipal bonds.
When an issuer fails to live up to the [...]

The interest income earned from municipal bonds is tax-free of all federal income taxes regardless of your tax bracket. This is the most significant benefit of municipal bonds and it is a characteristic unique to municipal bonds. Not even US Treasuries offer income that is free from federal income taxes.
Additionally, municipal bonds can be free [...]

Every municipal bond trade has 5 basic elements. The 5 elements are maturity date, interest rate, price, $ amount traded, and yield.
3 of the 5 elements are similar to the elements of a bank CD. For a CD, these are the amount invested, the length of the CD, and the interest rate. For a municipal [...]

This is an introduction on how to buy municipal bonds in the secondary market in the most basic sense. Individual investors can buy bonds when the bonds are originally issued or buy bonds in the secondary market after the bonds have already been issued. For the purposes of this article, we will cover buying bonds [...]

There are two ways to buy municipal bonds: 1) Investors can buy municipal bonds when the bonds are first issued or 2) investors can buy bonds after the bonds have been issued in the secondary market. This is similar to stocks; investors can buy stock during the IPO (initial public offering) or after the stock [...]