Credit Risk - Risk that the issuer is not able to pay the scheduled principal and interest on a full and timely basis. A change in the credit rating on bonds after they are issued can affect their value.
Interest Rate Risk - Interest rate risk is the risk that changes in market interest rates may increase or decrease the market value of a bond. When interest rates decrease, the price of fixed-rate bonds and notes increases, and when interest rates increase, the price of fixed-rate bonds and notes decreases.
For a more thorough discussion of the risks associated with a particular municipal security, potential investors should read the associated official statement and consult a licensed financial professional.