A bond.
A bond. - 
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STEVE CHIOTAKIS: Municipal bonds are a pretty popular buy because they're tax-free. Many investors buy those bonds despite the fact that they have low interest rates. But a lot of bonds right now are from risky borrowers, such as the state of California, which is in a budget deficit crisis.

Marketplace's Jennifer Collins reports other local governments held back selling their bonds when they realized there wasn't much demand.

Jennifer Collins: Georgia's Gwinnett County is one of those governments. Investors know Gwinnett for its top notch rating on sewer bonds. County finance director Aaron Bovos wanted to refinance those bonds this week in hopes of cutting utility bills.

Aaron Bovos: If we can save money and if we can reduce rates, it's certainly our desire to do that.

But investors demanded higher interest payments. Marilyn Cohen of Envision capital management says one reason for that: her home state California has billions of dollars in debt hitting the market.

Marilyn Cohen: Oh man. When you have the 800-pound, King Kong gorilla in the room and that's California, we start to dwarf some of the more prudent states that don't issue as much.

Cohen says market "indigestion" will continue for munis through December. Gwinnett County says it will wait until next year to refinance.

I'm Jennifer Collins for Marketplace.