Slow-Paced Tragedy Makes Stressed States Attractive to Citigroup

  • Pension crisis driving downgrades offers buyers opportunity
  • Citi recommends state bonds on cusp of downgrade for value

For a year, Citigroup Inc. has recommended a strategy that has been controversial among its clients: Buy debt issued by the lowest-rated U.S. states to boost returns in a market where tax-exempt yields sank to historic lows.

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