Insured and Prerefunded bonds these

clearlycanadian

do these bonds generally have a lower yield?

thisisbrianly

Yes, from the standpoint of an investor having a bond be pre-funded reduces the risk and therefore the expected return that an investor would require. Same with insurance, by having insurance the risk of default is somewhat mitigated, therefore investors will view it as relatively less risky compared to a bond without insurance and therefore be willing to settle for a lower yield.