Municipal Bond News & Insight

• States, Other Groups Support Kentucky in Court Case

Every other state in the nation has lined up behind Kentuckys effort to maintain its ability to tax residents income from out-of-state bonds while exempting its own.

• Housing Slump Expected to Have Limited Effect on Gov't Credit Quality

Although the housing market continues its slump and a high rate of default persists in the subprime mortgage industry, state and local government credit quality is not likely to dramatically suffer anytime soon.

• Stakes are High as Congress Wrestles with AMT Reforms

With an estimated $2 trillion at stake, several proposals are taking shape to reform the Alternative Minimum Tax (AMT), but none has emerged so far from Congress tax-writing committees. Tax-free bond investors are watching closely since interest earned on bonds known as private activity bonds is subject to the AMT.

• Kentucky Case Ruling Won't Affect Territory Bonds

Bonds issued by Puerto Rico, Guam and the Virgin Islands will continue to enjoy tax-exempt status, regardless of the upcoming Supreme Court decision on whether states may tax out-of-state muni bonds.