How Do Muni Bond Credit Ratings Work?

In this episode, Kathy and Liz Ann talk about the latest Fed meeting and how business have actually fared during profits season.

Then, Kathy is signed up with by Cooper Howard and unique visitor Jane Ridley of S&P Global. Their discussion checks out credit-rating agencies and the local bond market. They go over the role of rating agencies in evaluating the ability of companies to pay back debt, the significance of credit ratings for financiers, and the aspects considered in establishing ratings. They likewise discuss the differences between basic commitment bonds and income bonds, the frequency of rating updates, and the effect of bond maturities on rankings. The discussion deals with the performance history of rankings in the muni market and the factors for unrated community bonds. They likewise discuss what happens if a muni bond were to default.

On Investing is an initial podcast from Charles Schwab (). For more on the show, visit OnInvesting ().

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Important Disclosures

The information offered here is for basic informative purposes just and should not be considered a customized recommendation or individualized financial investment suggestions. The investment methods pointed out here may not appropriate for everybody. Each investor requires to evaluate an investment technique for his or her own specific circumstance before making any investment decision..

All expressions of viewpoint go through alter without notification in reaction to moving market conditions. Information consisted of herein from third-party companies is acquired from what are thought about reputable sources. However, its precision, efficiency, or reliability can not be ensured..

Examples offered are for illustrative purposes just and not planned to be reflective of outcomes you can expect to attain.

All corporate names and market data revealed above are for illustrative functions just and are not a recommendation, offer to sell, or a solicitation of an offer to purchase any security. Supporting paperwork for any claims or analytical information is offered upon request..

Investing includes danger, including loss of principal.

The remarks, views, and viewpoints revealed in the discussion are those of the speakers and do not always represent the views of Charles Schwab.

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Set income securities go through increased loss of principal throughout periods of increasing rate of interest. Fixed-income investments go through different other threats consisting of changes in credit quality, market evaluations, liquidity, prepayments, early redemption, corporate events, tax implications and other factors. Lower-rated securities undergo higher credit risk, default threat, and liquidity danger.

Tax-exempt bonds are not always appropriate for all investors. Info related to a security's tax-exempt status (federal and in-state) is obtained from 3rd parties, and Schwab does not guarantee its precision. Tax-exempt income might be subject to the alternative minimum tax. Capital gratitude from mutual fund and reduced bonds might go through state or regional taxes. Capital gains are not exempt from federal .

Interest income on individual local bonds may not be tax-exempt, depending upon the bond issuer, the kind of bond, or your state of home. Interest earnings on bonds provided by U.S. states, cities, counties, their business, and U.S areas is typically federal-tax-exempt, and state-tax-exempt for homeowners of the state in which the issuer resides. In addition, community bond interest for bonds released in U.S. territories is generally state-tax-exempt in all 50 states. Consult your tax consultant regarding your personal situation.

The info and content offered herein is general in nature and is for educational purposes just. It is not intended, and must not be interpreted, as a specific recommendation, individualized tax, legal, or investment guidance. Tax laws are subject to alter, either prospectively or retroactively. Where particular guidance is required or proper, people ought to call their own expert tax and investment advisors or other specialists (CPA, Financial Organizer, Investment Supervisor) to assist respond to questions about specific situations or requirements prior to taking any action based upon this information.

Previous efficiency is no assurance of future outcomes and the opinions presented can not be considered as a sign of future efficiency.

Projections consisted of herein are for illustrative purposes only, might be based upon exclusive research and are developed through analysis of historic public information.

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How Do Muni Bond Credit Ratings Work?

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