The recent study by Kenny S&P Evaluation Services entitled "Municipal Bond Defaults, The 1980's: A Decade in Review," which you commented on in your May 14 issue, is yet another attempt to define the default risk in municipal bonds. The press release for this impressive-looking document goes right to the bottom line; namely, that the default rate for the municipals is only 0.27% and for nonrated municipals it is only 1.93%. The Kenny conclusion on unrated defaults is therefore in line with the 2% rate found by the Public Securities Association in its Jan. 8, 1993, study and, thereby, helps to cement this number in the minds or investors as a true measure of default risk.

Nothing could be further from the truth.

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