This paper examines the behavior of the discount from Net Asset Value (NAV) of closed end municipal bond funds. The average discount across all funds examined is more than 5%. There is a wide range of variability however and strong evidence that in almost all cases, the discounts follow slow mean reverting processes. The time series analysis reveals that the discounts are positively correlated with trading volume and dividend yields and negatively correlated with the returns on the S&P 500. Discounts are correlated across funds, implying that the risk is systematic and therefore priced in the financial markets.