Risk of default on these bonds has never been higher -- hence the yield. The market has plummeted in the past few months, but don't try to catch a falling knife.
Quick SEC disclaimer... I'm not an investment professional; I'm just sharing my personal experience.
"Default" doesn't always mean that the principal won't get paid back. In almost all cases, it means that timely interest payments won't be made. Even in the most recent bond crisis in Puerto Rico, the "risk of default" was somewhat mitigated by the threat of shutting down the government offices (i.e. put the employees on unpaid furlough) just so the Puerto Rico could make their bond payments.
IMHO, it would be political suicide for a municipality or state to let bonds default. Here's an interesting article on this subject:
