Munis were once often issued with an insurance guarantee, but that practice fell out of favor after the financial crisis. But now, the cost of insurance has fallen and trend is turning again toward issuers insuring their bonds to get a higher credit rating. Investors can get a safer bond for not much of a premium, says Bill Walsh, co-founder of Hennion & Walsh, a brokerage firm that specializes in munis. For example, the city of Yonkers issued a single-A rated bond with insurance from Assured Guaranty, which brings it up to a double-A credit.

Lyle Fitterer, who heads the tax-exempt fixed-income team at Wells Capital Management, says there are good deals among municipal bonds that have suffered some collateral damage from the decline in energy prices. For example, he likes a Denton, Texas, public school premium bond that is triple-A rated and has a 3.05% yield-to-call.

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