• Trade Statistics
• Trend Data
• Market
• Yield
• Liquidity
• Volatility
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• Stress test
• Estimated Price

Summary Rating

Summary:

Computed based on a bond’s risk-return tradeoff compared to similar municipal bonds of the same maturity, bond class and state tax treatment.

The risk (risk of default) and return (yield) are usually directly related. The higher the default risk of a bond, the higher the yield necessary to compensate the investor for that risk. For a given level of risk, a rational investor will always choose a bond with a higher yield. Similarly, if two bonds have the same yield, an investor should prefer the bond with lower default risk.

In addition, the summary rating is based on the conservative view that most investors, particularly bond investors, are more concerned about a possible poor outcome than they are about a good outcome. They are accordingly willing to give up some portion of their return in exchange for a greater certainty of return.

The summary rating is calculated by resolving this associated risk with yield. As stated above, a bond's summary rating will never be higher than its market (default risk) rating. Furthermore, a bond with a poor yield will further lower the summary rating.

The summary rating, along with BondView’s additional ratings criteria, provide a compass to help investors come to their own conclusions prior to making bond investments. Bonds rated from five stars (best) to none.