Markets

Mar 2: MATT FABIAN on California bonds

Part 1, March 2 2009: Matt Fabian, managing director at Municipal Market Advisors, says municipal governments such as in California are facing massive budget shortfalls across the country, especially this year. This is likely to result in credit rating downgrades. Many municipal bondholders, however, are protected even then because they have to be repaid before many other municipal expenses are met. Investors in municipal bonds have changed, with leveraged institutional investors having gone, and individual investors buying bonds.