Municipal Bond Forum

FMSbonds, Inc.’s Municipal Bond Forum™ is an exclusive opportunity for investors to submit questions and comments on the bond market or to respond to one of our articles.

To participate, just send us an e-mail. Be sure to include your name or initials and your state of residence. Posted e-mails may be edited for length and clarity. If you prefer a private response, please note that in your e-mail. Responses are provided by James A. Klotz, president and co-founder of FMSbonds, Inc., a municipal bond specialist for more than 35 years, and other members of the firm as noted.

Postings are listed by date. If you have any questions, please call us at 1-800-FMS-BOND (1-800-367-2663) or e-mail us.

Out-of-state munis for California resident

I’m a California resident paying a 12% state tax. Do you think it makes sense for me to buy municipal bonds from other states?

Insured Puerto Rico muni bonds in demand

Why are you continuing to sell bonds issued by Puerto Rico? They can't pay their bond obligations now. I have over $100,000 of Puerto Rico bonds and I still can't get any answers as to when I’m going to receive my interest payments.

President Trump and Puerto Rico’s debt

What's the upshot of President Trump’s "pledge" to wipe out Puerto Rico's debt and how will this affect my Puerto Rico bonds? How far will the insurance on my Puerto Rico bonds carry me?

State of munis if corporate tax rates were cut

If corporate tax rates were reduced to, say, 25%, do you think the municipal bond market would be OK in terms of demand?

Why did Fed rates rise and muni rates ease?

After the Fed raised the benchmark lending rate by .25% last week, why are municipal bond rates off .15% across all maturities and credit ratings?

An opportunity during muni redemptions

I have a laddered portfolio of California municipal bonds, many of which were purchased in 2007 at or around par. Most have coupon rates of 5.00% and are being redeemed this month. In order to reinvest in similar munis, I had to pay a 16% to 20% premium. In your article, “Summer Forecast: A Muni Redemption Flood, Supply Drought,” you said investors can often enhance their tax-free income when bonds are redeemed. With regard to these 2007 bonds, I don't see how redemptions aren't an issue or how reinvesting in similar bonds can enhance my tax-free income. In the decreasing-rate environment that has been in place for around 30 years, shouldn't investors hope that older bonds are not redeemed?

Why trust the muni bond rating agencies?

Moody’s and Standard and Poor’s proved their fallibility in 2008 and before.Their ratings are useless.Why should I trust them now?

How can Puerto Rico bonds have AA rating?

Regarding your article, (Bondholders After Puerto Rico’s Bankruptcy Filing), I noticed you are still selling Puerto Rico bonds with an AA listing.Is there some mysterious way these bonds are safer than the ones I own?How do they get such a great rating?

Determining the ‘quality’ of a municipal bond

In your recent article (Muni Investors Succeed by Defying the Odds), you say investors should look for “quality” municipal bonds first, then yield. How should I base my determination of quality? Ratings? If so, which one do you feel has a better pulse on the muni bond market?

What to look for – and avoid – in a muni bond broker

We have a “prudent-investor” broker with another firm who put over $1 million into Puerto Rico bonds. We almost "killed" him when we found out what he did. Now we have to watch him very carefully to make small investments and gain a decent return. Any advice? We have about $2 million still invested. We understand a lot depends on the actions of the current government in Puerto Rico, which is very slow to react.
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