Not Your Father’s Muni Bonds

My Father loved municipal bonds.  The coupons were high (certainly higher than the average coupon rates of today) and supply was ample. And he loved the story behind the bond.

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As a quick primer, “muni bonds,” otherwise known as municipal bonds, are debt obligations issued to fund capital expenditures by municipalities, states, counties and other government and public service-related entities like hospitals and schools. The tax treatment of the interest paid is typically Federally tax-free to the investor and often state tax free in the state where the bond was issued. Investors who buy the bonds are promised to receive tax free interest periodically and then repayment of principal upon maturity. Continue reading “Not Your Father’s Muni Bonds”