Will there be defaults in munis?

Rick Taormina, head of the municipal strategies group at JP Morgan Asset Management, says defaults among US municipal debt issuers will rise, but he "does not think it's going to be an epidemic". He says it is not clear what the effects will be on traditional US municipal bonds, bought by local investors seeking to lock in tax benefits. He also discusses the likely end of Build America Bonds - bonds sold since the financial crisis to help build infrastructure across states with subsidies from the US government, helping keep costs lower rather than tax incentives. The programme has reduced bond supply in the traditional muni market.