Just think of the big American cities in the news this year, Baltimore, St. Louis, Chicago, Detroit.
From Barron's Income Investing:
Underfunded pensions are an increasing headache for municipal bond investors, a topic covered in this week’s Current Yield column in Barron’s, “Muni Investors Face Pension Woes.”
A near-term concern is that the securities will be downgraded by credit rating agencies, causing a downdraft in the price of the bonds.
But a longer-term concern for holders of bonds issued by cities is that underfunded pensions could eventually lead to crippling social problems, said Tom Tzitzouris, head of fixed income research at Strategas. He was speaking Tuesday at a conference on munis put on by the Global Interdependence Center....MORESee also:
"San Francisco Is Smarter Than You Are"
Municipal Bonds: "Judge Approves California City’s Bankruptcy-Exit Plan"
