U.S. investors have replaced the giant life insurance companies as the principal buyers of municipal bonds. This news was double-checked last week when the third largest U.S. life insurer, New York Life, announced that it had sold $106,000,000 in municipal bonds last year, thus cut its municipal holdings almost in half. Other big—but not officially reported—sellers were Metropolitan and Prudential (which unloaded big blocks of Toledo Water Revenues and Nashville Electric Revenues on the market).
The insurance companies sold partly by choice, partly because they had to. They wanted to unload because municipal bonds are quoted near the highest prices ever, many...
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