Gruber

Bright Spot for Leverage - Increasing Yield, Narrowing Discounts In Levered Municipal Bond Funds

While current interest rates on ARPs are low due to prospetus covenants relating to a low default rate on unsuccessful auctions, isn't this a temporary phenomenon? It seems CEFs are anxious to pay-off the ARPs and such refinancings is likely to boost leverage expense above the current low default interest rate. Wouldn't this likely result in a deminished future distribution?

Gruber