Some retail investors are being more cautious when shopping for tax-exempt bonds in Pennsylvania — where the number of distressed municipalities is growing — but overall, that hasn’t decreased the volume of trading in the state, according to local traders and underwriters.

“I think people are cautious of some cities, but no more cautious than they would be for similarly rated bonds,” said Alan Schankel, managing director of municipal research and strategy at Janney Montgomery Scott in Philadelphia.

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