https://www.barrons.com/articles/municipal-bonds-are-in-short-supply-heres-where-to-find-value-51560769200Municipal Bonds Are in Short Supply. Here’s Where Investors Can Find Value.
By Alexandra Scaggs
June 17, 2019 7:00 am ET
Photograph by Patrick Smith/Getty Images
Once again, U.S. municipal-bond investors will be awash with cash this summer as bonds mature and get called. Strategists in UBS’s wealth management division have suggestions for where investors can put that money.
A second option for investors is toll-road bonds, which “when owned and operated by the public sector, exhibit relatively strong credit characteristics,” the bank says.
Only two publicly owned toll roads have defaulted since 1970, according to Moody’s, while their privately operated peers have a more mixed track record. Like with the airports, investors should look for toll-road bonds with strong local economies and healthy balance sheets.
Another thing to consider is the local competition faced by the toll road or bridge in question. For example, it is nearly impossible for drivers in San Francisco to escape paying the Bay Area Toll Authority, which owns and operates nearly all of the bridges in the San Francisco Bay Area. New York’s Triborough Bridge & Tunnel Authority is a similarly low-risk option, according to UBS. Oklahoma’s and Maine’s Turnpike Authorities also benefit from low competition.
For investors looking for tax-exempt income in states without financially strong highway authorities or airports, a good option may be municipal electric utilities.
Buy high grade bonds like electric., airports are - recession proof-
