Credit insight identifying risk/reward opportunities and bonds to avoid.
When considering the purchase or sale of municipal bonds in amounts of $100K and more,
getting an independent credit appraisal from BBR can pay handsomely.
Know more about professional sports, or high fashion than municipal bonds?Can your broker or advisor opine on the appropriateness of agency ratings on particular bonds understanding that pricing and credit spread are rating dependent?
Just what is the difference in risk of nonpayment between “A” rated and “AA” bonds?
The three largest nationally recognized Credit Rating Agencies do not answer that fundamental question, nor how long can an investor rely on their opinions? WE answer both . (rating scale)
Tax exempt credit spreads can equal 100 basis points, one percent, or more per annum, depending on how the market sees credit risk generally and what bonds are rated. A 50 basis point spread between "A" and "AA" bonds is worth $50,000 in U.S. exempt income on $1 million par over ten years - $10k per 10 basis points.
The informed choice is made when the result of a BBR appraisal is compared to the agency rating opinion on the same bonds. In other words, is that "A" rating rightfully a "BBB" and if so is it worth 50 basis points to you now knowing the difference in expected default rate.(credit value index).
It pays to have an expert on your side.
Benchmark Bond Ratings, Inc ®, Garden City, NY Tel 516 280 3577 Fax 516 741 5005