Default Rates
The historical default rate for municipal bonds is lower than that of corporate bonds. The Municipal Bond Fairness Act (HR 6308), introduced September 9, 2008, included the following table giving bond default rates up to 2007 for municipal versus corporate bonds by rating and rating agency.
Cumulative historic default rates (in percent) ------------------------------------------------------------------------ Moody's S&P Rating categories --------------------------------------- Muni Corp Muni Corp ------------------------------------------------------------------------ Aaa/AAA......................... 0.00 0.52 0.00 0.60 Aa/AA........................... 0.06 0.52 0.00 1.50 A/A............................. 0.03 1.29 0.23 2.91 Baa/BBB......................... 0.13 4.64 0.32 10.29 Ba/BB........................... 2.65 19.12 1.74 29.93 B/B............................. 11.86 43.34 8.48 53.72 Caa-C/CCC-C..................... 16.58 69.18 44.81 69.19 Investment grade................ 0.07 2.09 0.20 4.14 Non-invest grade................ 4.29 31.37 7.37 42.35 All............................. 0.10 9.70 0.29 12.98 ------------------------------------------------------------------------Read more about this topic: Municipal Bond
Famous quotes containing the words default and/or rates:
“In default of inexhaustible happiness, eternal suffering would at least give us a destiny. But we do not even have that consolation, and our worst agonies come to an end one day.”
—Albert Camus (1913–1960)
“In the U.S. for instance, the value of a homemaker’s productive work has been imputed mostly when she was maimed or killed and insurance companies and/or the courts had to calculate the amount to pay her family in damages. Even at that, the rates were mostly pink collar and the big number was attributed to the husband’s pain and suffering.”
—Gloria Steinem (20th century)