• “This is an asset class that defies conventional treatment due to the sheer scope and diversity of the sectors that it encompasses. Just like its taxable counterpart, the high-yield municipal asset class deserves recognition as a stand-alone global asset class, with its own internal dynamics, whose investment potential is made more topical by the current state and local government fiscal crisis.”

• “By the summer of 2007, the market was set up for a financial 'perfect storm.’ While the entire municipal market suffered along with every other asset class, the high-yield sector experienced a complete meltdown in liquidity. High-yield spreads gapped out to more than 600 basis points, a new historical wide.”

• “As we get into the second decade of this century, one clear lesson can be drawn from the credit successes and failures of the past. The high-yield tax-exempt investor must be wary of taking on equity-like risk in exchange for bond-like return.”

• “Over the last 10 years, high-yield municipals have exhibited attractive  risk-return characteristics and have held their own against other competing asset classes, including corporates and equities. This is quite a remarkable record, achieved in spite of the unprecedented market volatility of the last three years.”

• “The beauty of the high-yield market lies in the fact that most of the time, micro — not macro — factors drive the credit, a feature that you should optimize in constructing your portfolio.”

• “Ironically, one of the reasons many unrated municipals default — their weak capital structure — is also the main reason recovery values are relatively high: bondholders are usually the only stakeholders at the table.”

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