Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from dealing with unscrupulous investment brokers selling municipal bonds.
Although municipal bonds are generally regarded as “safe,” that is, investors are, in most cases likely to be paid interest over the life of the bond, “muni” bonds don’t guarantee payments. The market has been under duress lately as the coronavirus pandemic has bruised government bodies by reducing tax revenues. If investors generally fear that they won’t be paid, then prices of these bonds fall.
Municipal bonds are debt securities usually issued by government entities to raise money for a wide range of projects from schools to airport expansions. Munis come in several varieties. Many “general obligation” bonds have interest payments, or coupons, that are not taxed while others are taxable. Like other bonds, their coupon yields are based on the amount of risk an investor takes in purchasing them. The higher the risk, the lower the bond’s credit rating – and the higher the interest payment. You’re usually compensated for taking on more risk.