No. of Recommendations: 0
You are right about that. From Jan 1994 to September 1994, as short-term interest rates rose, the market price of KTF went from $8.65 to $7.02, a haircut of about 20%. Two points to note:

1. The dividend payout continued without a hitch.

2. Currently the price is down more than 15% from the peak, precisely as a response to the potentially higher interest rates. It is also trading at a 9% discount to NAV. The marketplace is discounting potential problems, just as you state.

It still looks very good to me, for a 10-year hold...

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