MIG ratings are typically assigned to which type of bonds?

MIG ratings, or Municipal Investment Grade ratings, are typically assigned to revenue anticipation bonds. These ratings help investors assess the creditworthiness of short-term municipal securities, which are often issued to finance the expected revenue from specific projects or revenue streams. Revenue anticipation bonds are used by municipalities to raise funds against anticipated revenues, such as tax collections or fees.

The MIG ratings indicate the likelihood that the issuer will be able to meet its short-term debt obligations. This is particularly important for revenue anticipation bonds, as they are dependent on the successful generation of revenue, which can fluctuate based on economic conditions and other factors. Therefore, the assessment provided by MIG ratings serves to inform investors about the risk associated with these types of bonds, reflecting the financial health of the entity issuing the bond and the anticipated cash flow to support it.

While general obligation bonds, revenue bonds, and double-barreled bonds can also be important areas of investment in the municipal bond market, they do not typically receive MIG ratings in the same manner as revenue anticipation bonds, as their risk assessment mechanisms differ.