Fouryears ago many of our clients wanted to bail on California credits as a whole and we cautioned that there were many well run credits and attractive relative value opportunities (airports, universities, community colleges, utilities, school districts). Now the state has improved their revenue streams and raised taxes on the highest earners creating more demand for in-state tax exempt bonds, resulting in a spectacular rally in the California market. In January 2011 SNW bought San Francisco Airport paper maturing in 2018 at a 4% tax-free yield. These bonds are now trading 10% higher in price and at a 1.45% yield. Conversely, we have been questioned on and off for many years as to why we do not buy or hold high yielding Puerto Rico or Detroit Sewer debt in which we cited underlying fundamental credit issues. Today, Detroit has filed for bankruptcy and the sewer bonds’ future is up in the air while Puerto Rico debt is trading for cents on the dollar. Puerto Rico Development Bank 2019s traded last week at 65 cents on the dollar, down 35% from the new issue pricing in late 2010). What guides our purchase decisions is a deep understanding of each municipal credit we own and an eye for risk adjusted return. The municipal bond landscape is changing. So when the geography is new it pays to have a dedicated guide and liquid assets to take advantage of new opportunities.