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AAA States Beating Market for First Time Since 2008: Muni Credit

The highest-rated U.S. states are set to beat the rest of the $3.7 trillion municipal market for the first time since 2008 as the worst bond rout in more than two years draws investors to safer debt.

State general obligations with a AAA grade have lost 2.3 percent in 2013, compared with a 3.3 percent drop for the broader market, Bank of America Merrill Lynch data show. It would be the first time in five years for the segment to outperform all local debt on an annual basis. The index includes debt from 14 states, including Utah, which sold bonds last week, as well as Maryland and Texas, which plan to borrow this month.