Muni Bond Default Rate Stayed Low During Pandemic, Moody’s Says

Defaults in the $4 trillion municipal bond market have always been rare, and the pandemic hasn’t changed that, according to Moody’s Investors Service.

None of the state and local bonds Moody’s rates defaulted in 2021, but ratings were more volatile than the prior year, the New York-based rater said in its annual default study. Two credits drew on debt service reserve funds last year: student housing financing at Rowan University in New Jersey and one at Florida International University.

The low rate is a reflection of the muni market’s resilience through the course of the pandemic, bolstered by a combination ...