Biggest Taxable Rally Since ’94 Narrows Company Gap: Muni Credit
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Municipalities from Wisconsin to Connecticut are paying the smallest yield penalty in three years on taxable borrowings as investors seek out securities with higher interest rates and lower defaults than corporate debt.
With buyers looking to increase their income as Federal Reserve Chairman Ben S. Bernanke pledges to keep the central bank’s key overnight rate near zero through mid-2015, the extra interest rate paid by localities over companies has collapsed by about 76 percent this year, the most since at least 1994, data compiled by Bloomberg show.