The yield on a closely watched index of 30-year triple-A rated, tax-exempt municipal securities climbed 0.12 percentage point higher to close at 4.48% Tuesday, according to Municipal Market Data.

WSJ: Tax-Cut Deal Results in Turmoil for Bonds

Fannie and Freddie's debt and securities are exempt from regulations that limit banks' exposure to the securities of any single private company.

ECONOMIST: Homesick blues

But the municipal securities market is thinly traded and largely exempt from the controls of both the Securities Act of 1933 and the Securities Exchange Act of 1934.

FORBES: Could Municipal Bonds Be the Next Financial Titanic?

In the middle panel David Armstrong describes a low-risk strategy: tax-exempt bonds that, like Treasury Inflation-Protected Securities, give you a return over and above inflation.

FORBES: The Bupkes Bond

The securities being sold by Chestnut are unregistered, making them exempt from SEC oversight.

FORBES: Magazine Article