State credit spreads have compressed across the curve over the last few years as investors move down in credit quality to pick up extra yield. With lower-rated credits compressing and now trading on top of higher-rated credits, many market participants think now is the time to exit those trades before spreads start widening.

Market participants say that by moving back into double-A rated credits from single-A rated ones, the investor isn't losing any income, and is moving up in credit quality.

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