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Municipal Default Risk  


Author:  David Litvack.; Frank Rizzo.


Source: Volume 21, Number 02, Summer 2000 , pp.25-42(18)




Municipal Finance Journal

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Abstract: 

Bond ratings should reflect the probability of default, so it makes sense to know the history of defaults. Municipal analysts David Litvack and Frank Rizzo provide a comprehensive examination of the default risk of various municipal market sectors over 20 years. Their study, which includes data on defaults by sector and issuer type, emphasizes that default risk varies by sector, with state GO bonds, where defaults are virtually non-existent, are considerably lower than, for example, hospital bonds, where defaults can and do occur.

Keywords: credit ratings; default probability

Affiliations:  1: Fitch IBCA; 2: Fitch IBCA.

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