Data from the Municipal Bond Fairness act has cumulative historic default rates for various ratings of municipal and corporate bonds.
Here is the table :
|CUMULATIVE HISTORIC DEFAULT RATES |
A few things strike me about this. First of all the cumulative default rate for junk bonds is awfully high. On the other hand the cumulative default rate for investment grade bonds is quite low. There is a significant difference in the risks of default between high rating and low rating bonds over their lifetime.