Cornerstone Research analyzed empirical evidence and academic literature to estimate the likelihood of default and bankruptcy by municipal issuers and entities. On behalf of a U.S. based company, Cornerstone Research staff analyzed empirical evidence on historical lifetime default rates of various types of municipal bonds. We also reviewed a wide variety of academic literature and studies by major rating agencies such as Moody’s, Standard and Poor’s, and Fitch Ratings. Our work included analysis of: Traditional municipal sectors such as transportation, as well as public utility versus non-public utility entities in healthcare, multifamily housing, and industrial development sectors. Credit ratings of senior-lien and subordinated debt issued by municipal electric utilities in specific state

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