Officially the government does not guarantee the repayment, but there has never been a default and the Government is widely assumed to be ready to make payments if the need arise. Thus, the principal is guaranteed, but the interest payments are not. The key thing to remember is that the interest on these can be tax-free. Muni s can be general obligation bonds or revenue bonds. As a genreal rule the interest on Munis is tax free to residents of the state of the issuer.
Capital gains are taxable.
There is periodically discussions in Congress to end the tax exemption. In 1986 some of the tax benefits were taken away and there are now taxable muni s as well. These bonds that are issued by corporations. Each bond issue must have a trustee that looks out for the bondholders. There are an almost unlimited variety of the types of corporate bonds.