No. of Recommendations: 5
An article in the WSJ, about a week ago, mentions lots of money pouring into hi yield municipal bonds.

-High yield muni funds are now flush with cash...more than in past three decades

-Barclay hi-yield muni index is 4.5%, lowest its been in 16 years.

-Hi yield issuers include charter schools, retirement communities, utilities, companies, etc. Their bonds are not backed by anyones taxing authority.

-Default rate on munis is a tenth of a percent. Default rate on unrated munis is 2 1/2%

-Example given are Virgin USA, or Brightline, that are working on a train between Orlando and Miami. Despite losing money, they sold off $1.8 billion in muni bonds...the largest issue of unrated bonds in last 5 years.
Another was RES Polyflow Indiana project to build a facility in Ashley, Indiana, sold off to yield 7%...had more demand than issues.

Main jist of the article is that the risk/reward ratio is now out of wack for high-yield munis.
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