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Hedge funds that trade municipal bonds have been hit by margin calls in recent days and some are having to sell positions to meet those obligations, according to a leading investor in the market.

Problems with bond insurers and other disruptions from the global credit crunch have pushed yields on muni bonds close to, or above, those of comparable Treasury bonds. That’s hurt hedge funds that try to make money from the difference, or spread, between those yields. Muni bonds usually yield less than Treasurys, partly because they are [...]

This entry was posted on Saturday, March 1st, 2008 at 12:17 am and is filed under Dollar Investment. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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