WASHINGTON -- An increasing number of municipal bond issues with indexed inverse floaters contain a new feature: an investor option to reverse an embedded swap and convert to fixed rates.

Industry officials said last week that the rate conversion feature makes inverse floating bonds more attractive to investors who are worried that rates may head up again and diminish their returns from these bonds, which act inversely to the market.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.