Municipal defaults remain rare, but recent data shows a widening gap between the safest and riskiest sectors, highlighting the need for careful credit research and selective sector exposure.
Key Takeaways:
- “Risky” muni sectors show rising defaults while “safe” sectors defaults remain near zero.
- Senior living, charter schools, and Industrial Development Bonds drive most default activity.
- Diversification and focus on essential-service credits remain crucial in the muni sector.
vaneck.com
by Tamara Lowin
Senior Municipal Credit Analyst
December 09, 2025