The Invesco Fixed Income Municipal team takes a comprehensive view of municipal default risk, as we assume a higher baseline rate of municipal default than perhaps other market participants. We continually monitor prevailing developments around distressed issuers. Invesco’s municipal research process is designed to help detect declining credit trends and ultimately aims to avoid defaults. Our experienced municipal portfolio management and research team has many tools at its disposal to maximize recovery, should a default situation occur.
1 Standard and Poor’s, Moody’s Investors Service, July 17, 2015.
2 US Securities and Exchange Commission, July 31, 2012, Invesco, July 20, 2015.
3 MMA, Invesco, July 17, 2015.
Read more expert views on fixed-income investments.
Important information
Municipal securities are subject to the risk that legislative or economic conditions could affect an issuer’s ability to make payments of principal and/ or interest.
Fixed-income investments are subject to credit risk of the issuer and the effects of changing interest rates. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. An issuer may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.
This article was written by Eric Nelmark, a Senior Analyst with Invesco Fixed Income, with a primary focus on Invesco High Yield Municipal Fund.