Why Fears About Municipal Credit are Overblown

Bergstresser, Daniel; Cohen, Randolph

doi:10.2139/ssrn.1836678

Abstract

References (17)

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Why Fears About Municipal Credit are Overblown

Harvard Business School - Finance Unit

April 30, 2011

Harvard Business School Finance Working Paper No. 1836678

Abstract:
Highly publicized predictions of 50-100 municipal defaults have caused anxiety among municipal bond investors. While there is some chance that negative investor sentiment will lead to further spread widening, the probability of the kind of widespread default that would be required to justify current municipal bond yields is low. In this paper we document the reasons why the fears of widespread municipal default during the current recession are overblown.

Number of Pages in PDF File: 48

Keywords: Municipal bonds

JEL Classification: H74

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Date posted: May 10, 2011 ; Last revised: June 21, 2011

Suggested Citation

Bergstresser, Daniel B. and Cohen, Randolph B., Why Fears About Municipal Credit are Overblown (April 30, 2011). Harvard Business School Finance Working Paper No. 1836678. Available at SSRN: http://ssrn.com/abstract=1836678 or http://dx.doi.org/10.2139/ssrn.1836678

Contact Information

Daniel B. Bergstresser (Contact Author) Harvard Business School ( email ) Soldiers Field Road Morgan 270C Boston, MA 02163 United States
Randolph B. Cohen Harvard Business School - Finance Unit ( email ) Boston, MA 02163 United States 617-495-6674 (Phone) 617-496-6592 (Fax)

Abstract

References (17)

Why Fears About Municipal Credit are Overblown

Daniel Bergstresser

Randolph B. Cohen

Date posted: May 10, 2011 ; Last revised: June 21, 2011

Suggested Citation

Contact Information

Daniel B. Bergstresser (Contact Author)

Randolph B. Cohen