How new risks could crimp the appeal of muni debt
Climate change and online hacking could substantially affect the allure of US municipal bonds, despite their current appeal. Asset owners will need to be warier as they invest.
Municipal bonds are enjoying a surge of demand. Everybody from pension funds and insurers to mutual funds has sought out the instruments in order to wring out a little more yield than the anorexic returns provided by the debt of many central governments. And they are doing this while enjoying tax-free status on many of the instruments.
Cities in the US have been quick to take advantage of this demand, which led to the municipal bond market hitting over $400 billion in new issuance…
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