Muni Bond 2 year old possible chapter 9 warning
Today, I received an email from Fidelity indicating, "Event Description: POSSIBLE CHAPTER 9 FILING (08/19/09)". This is for a Detroit Michigan school district bond. I called Fidelity and spoke with a fixed income person who indicated that they are not sure why one of the bond analysis companies are sending out old alerts. I guess this is not the only case. He looked up the history and apparently two years ago the school district was contemplating filing chapter 9 and it apparently never happened. I could currently sell my bond for more than I paid for it (over $25k). Part of me wants to sell it since it is Detroit + School district (No offense to any Detroitians out there) - so, why take the risk? And part of me says to keep it since I do not believe I could find another 5% bond (with a 2028 maturity date) with a high rating. Any opinions?