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Muni Bonds

Series 52

A bond secured by one or more designated taxes other than ad valorem taxes. For examples, bonds for a particular pupose might be supported by sales, cigarette, fuel or business license taxes. Special tax
A charge imposed against a property in a particular locality because that property receives a special benefit by virtue of some public improvement, separate and apart from the general benefit accruing to the public at large. Special Assessment
A bond secured by both a defined source of revenue (other than property taxes) and the full faith and credit of an issuer that has taxing powers. Double barreled
A bond from an issue that is secured by lease payments made by the party leasing the facilities financed by the issue. Lease rental
The issuer’s proportionate share of the debt of other local governmental units that either overlap it or underlie it. Overlapping debt
Bonds or other securities issued by a municipal issuer for which interest or other investment return is included in gross income for federal income tax purposes. Taxable muni bond
Short-term, unsecured promissory notes, usually backed by a line of credit with a bank, that mature within 270 days (9 months) Tax-Exempt Commerical Paper
A municipal security issued by an issuer that, but for section 2(b) of the Investment Company Act of 1940, would constitute an investment company. Municipal fund securities generally have features similar to mutual funds & aren't fixed income securities. Municipal Fund Security
Annual rate of return on an investment, based on purchase price of investment, its coupon rate and the length of time held. Yield
A muni security on which the investment return on an initial principal amount is reinvested at a stated compounded rate until maturity, at which time the investor receives a single payment representing both the initial payment and total investment return. Capital Appreciation Bonds
A bond having a fundamental feature that changes in a prescribed manner at a future date. Convertible/stepped coupon
Can be exercised only on or after a specified date, typically beginning approximately ten years after the issue date. Optional redemption
Allows an issuer to call the bonds in instances of extreme unforeseen circumstances. Extraordinary redemption
A refunding transaction where the municipal securities being refunded will all mature or be redeemed within 90 days or less from the date of issuance of the refunding issue. Current Refunding
A refunding in which the refunded issue remains outstanding for a period of more than 90 days after the issuance of the refunding issue. Advance refunding
A method of advance refunding in which the revenue stream originally pledged to secure the refunded bonds continues to to be used to pay debt service on the refunded bonds until they mature or are called. Crossover refunding
Issuer can redeem bonds by repurchasing them in the open market. Open market purchase
Taxation based on an alternative method of calculating federal income tax intended to ensure that taxpayers are not able to avoid paying any federal income tax. Alternative minimum tax
An accounting process by which the book value of a security purchased at a premium above par is decreased during the security's holding period. Amortization of premium
An accounting process by which the book value of a security purchased at a discount from par is increased during the security's holding period. Accretion of discount
The total price paid to acquire that security including any transaction fees. Cost basis
The sale of a security at a loss and the simultaneous purchase of another simiarly security. By creating the loss, the swap reduces the investors current tax liablility. Tax swap
Issuer invites all interested parties to submit bids on their issue. competitive sale
The underwriters work with the issuer to bring the issuer to market. negotiated sale
The expected spread in a new issue offering. Production
A proposal to purchase securities at a specified price. Bid price
A document prepared by or on behalf of the issuer of muni securities in connection with a primary offering that discloses material information on the offerings of such securities. Official statement
With respect to a new issue of muni securities, a consultant who advises the issuer on matters pertinent to the issue, such as structure, timing, marketing, fairness of prcing terms and bond ratings. Financial advisors
A facility of MSRB for receving electronic submissions of muni securities disclosure and other key documents and related information and for making it available to the public at no charge. EMMA
A systme ofr the electronic transmission of a confirmation from a broker to an institutional investor, the transmission of an affirmation of that confirmation by the investor, and the automative book entry settlement of transaction National Institutional Delivery System (NIDS)
The prices and or yields, listed by maturity, at which new issue securities are offered for sale to the public by the underwriters. Scale
A method of computing the interest expense to the issuer of bonds, which may serve as the basis of award in a competitive sale. Net interest cost
Known as Canadian Interest Cost, the interest expense to the issuer of bonds, is defined as the rate, compounded sem-annuall, necessary to discount the amounts payable on the respective P&I dates to the purchase price received for the new issue of bonds. True interest cost
The number of bond years in an issue is equal to the product of the number of bonds and the number of years from the dated date to the stated maturity. Bond years
An order given to the syndicate manager, prior to the purchase of securities from the issuer, that indicates a prospective investor's intention to purchase the securities at a predetermined price level. Pre-sale order
In the sale of a new issue of muni securities, the amount of reduction from the public offering price a syndicate grants to a broker dealer that is not a member of the syndicate. Concession
normally the largest component of the spread, similar to a commission, which represents the income derived from the sale of securities. takedown
The rules adoped by an undewrting syndicate specifying the priority to be given different types of orders received by the syndicate. Priority provisions
an order, that if allocated, is allocated at the public offering prices without deducting concession or takedown. Group net order
An order submitted by a syndicate member on behalf of a buyer on which all or a portion of the takedown is to be credited to certain members of the syndicate. Designated orders
an order submitted by a syndicate member where the securities would be confirmed to that member at syndicate terms. member order
Will be operated by DTCC and will act as a central collection point for standardized electronic files of new issue information provided by undewriters which be disseminated in real-time to info vendors. New Issue Info Dissemination (NIIDS)
System through which muni securities dealers or their agents submit interest rate resets and documents for auction rates and variable rate demand obligations. Short Term Obligation Rate Transparency (SHORT)
A list of bonders held in their inventory along with the corresponding offer pices. Dealer's offering sheets
In some cases, a broker dealer may ask another firm to assist it in selling bonds in the secondary market. Brokers brokers communication
A municipal securities trade between two broker dealers in an agency or principal transaction. Inter dealer communications
A system that provides a platform for trading securities among multiple counter parties. Alternative Trading System (ATS)
A broker dealer that executes securities transactions exclusively with other broker dealers and not with public investors and they don't take inventory positions. Brokers broker
The price or yield at which broker dealer offer securities to investors. Bid
The prices where security is offered to investors. list
The most recent bid for a security is lower than previous bid. Down bid
A bid price at which a broker dealer states its willingness to purchase securities from anotehr broker dealer. Workable indications
A designation that a quotation will not be charged for a specified period of time and will be the price of any transaction executed with the party to whom the quotation is given during that period. Out firm
A trading situation in which the picess shown for a particular security by the broker dealer posting the highest bid and th bd showing the lowest offer are the same. Locked market
The difference between the winning bid on a new issue or secondary market transaction and the next best bid. Cover bid
The Total dollar volume of municipal securities expected to be offered over next 30 days. Visible Supply
The amoutn of bonds sold by underwriting syndicate each asa % of the amount issued that week by issues selling $1,000,000 par value or more of securities. Placement ratio
Their mission is to develop policies and practices which strengthen financial markets and which encourage capital availability, job creation and economic growht while building trust and confidence in the financial industry. Securities Industry and Financial Markets Association (SIFMA)
A benchmark interest rate upon which many transactions are based. London Interbank Offered Rate (LIBOR)
The total property and resources available to a governmental entity for taxation. Tax base
More than one industry in the area, showing that a municipality is not dependent on any one industry. Diversification of economic activity
Whether the issuer has maintained a balanced budget over the last 5 years and how the issuer has maintained fund reserves. Present and past attitudes toward debt
How the municipality's obligations are growing or shrinking in relation to available resources. Debt trend
The sum of the total bonded debt and any short term debt of the issuer. Direct Debt or Gross Bonded Debt
Direct debt less sinking fund accumulations and all self supporting debt. Net Direct Debt or Net Bonded Debt
The amount of an issuer's debt outstanding divided by the population residing within the issuer's jurisdiction. Per capita net debt
A report detailing the economic practicality of and the need for a proposed capital program. Feasibility study
This permits additional bonds provided the prior year's revenue would have been adequate to cover the new issue. Open end indenture
This subordinates all future bonds except those required to complete construction of the facility. closed end indenture
Monies are deposited to be used for the purpose of the costs of operating and maintaining the financed project. Operation and maintenance fund
Monies are placed in reserve to be used to pay debt services if pledged revenues are insufficient to satisfy the debt service requirements. Debt service reserves
Monies are deposited to cover extraordinary maintenance or repair expenses of the project whose revenues are pledged to the bonds. Reserve maintenance
a fund into which monies are deposited to cover anticipated expenses for major repairs of the project whose revenues are pledged to the bonds or for repair and replacement of related equipment. Renewal and replacement
A pledge that net revenues will be used for payment of debt service. Net revenue pledge
A pledge that all revenues will be used for debt service prior to deductions for any costs or expenses Gross Revenue pledge
Net pledged revenues divided by debt service requirements Debt service coverage
The ratio of the annual dollar amount of interest paid on a security to the purchase price or market price of the security, stated as a percentage. Current Yield
Annual interest payment divided by Current market price Current yield formula
Taxable yield multiplied by 100% minus marginal tax bracket After tax yield
Tax exempt yield divided by 100% minus marginal tax bracket Taxable Equivalent yield
A measure of the timing of the cash flows to be received from a given fixed income. Duration
A measure of the price of a fixed income security to changes in interest rates. Convexity
The date on which an issuer's initial interest payment to bondholder's on a particular security is due. regular coupon
An interest payment for a period other than the standard six months. Odd first coupon
A designation that a particular transaction has been effected on terms that do not include accrued interest. Flat
A bond purchased in the secondary market at a price that is less than the original issue price plus the accreted original issue discount, if any, through the date of purchase. Market discount
Created by: swalmurph2