By Paul Burton, includes “Detroit's bankruptcy showed that municipal bonds are no longer a risk-free investment, according to Hernando Montero-Salazar, director of credit analysis at Stoever Glass & Co. In Detroit, federal Judge William Rhodes essentially ruled that a municipality's full faith and credit pledge does not guarantee full bondholder recovery. "One of the main takeaways from Detroit is that all municipal investors are facing uncertainty with distressed credits," said Montero-Salazar. "The sanctity of general obligation bonds have been put into question. There is a need for clearly understood credit risk." …”