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Municipal Securities

QuestionAnswer
Principal and interest from Revenue bonds are paid from.... fees imposed on the users of the facility for which the bond was issued.
A _________ is conducted before a revenue bond is issued to deermine whether a project is necessary and wheter it can pay for itself Feasability study
True or False: A GO bond is riskier than a Revenue bond and thus has a higher coupon. False
User Fee Revenue Bond Payed by fees charged for water and sewage usage
Tolls and Fees bond Revenue bond payed by fees charged for the usage of highways, toll bridges, airports, and other projects
Special Tax Bond Revenue Bond issued for specific purposes such as building or renewing roads or rapid transit system. Paid from revenues from tax placed on specific items such as gasoline or tobacco tax
Special Assessment Bond issued to genreate money either to purchase specific property or construct facilities for a specific group of users. (only revenue bond to gain fees from property taxes)
Industrial Development Bonds issued by muni for corporation to finance projects such as pollution facilities, industrial parks, stadiums, airports, or educational facilities. Rating is based on that of the corporation.
Public Housing Bonds finances low income housing. Backed by the federal government, paid for by rent or mortgage payments
Double Barrel Bonds Revenue and a GO bond at the same time. Paid by the revenues of facility first, and then by property taxes if not fully covered.
Moral Obligation Bonds paid for by revenues of facility, and backed by annual appropriation from state.
True or False: BABS are liquid False
Basis Book used to change yields to dollars or dollars to yields
True or False: Put bonds can be redeemed prior to maturity without being called by the issuer True
During the Put Period, the ________ never exceeds the _________ Yield; Coupon
True or False: Muni's can be registered as interest only False
What is listed in the INDENTURE? Maturity Dates, Interest Rates, Name of Trustee, Protective covenants
What cannot be listed in the INDENTURE? Yield to maturity
Part of the indenture can be found in the ________ official Statement
Net Revenues Pledge Expenses are paid before debt service
Gross Revenue Pledge Debt service is paid before expenses
Sinking Funds are set up for _______ only Term bonds
Money from sinking funds must be invested in.... US government securities
Feasability studies and Engineering Reports are for what type of bonds? Revenue Bonds
The IRS _________ tax exempt status. The bond counsel _________ tax exempt status. Determines; Assesses
Legal Opinion/Bond Counsel Duties Researches laws and checks requirements, assists in getting legislation passed, supplies info to underwriters
The day interest accrual starts is the dated date
Three bond Rating Agencies Standard and Poors, moody's, fitch's
The three bond rating agencies rate what type of bonds? GO Bonds and Rev bonds that are backed by property taxes.
True or False: MRSB rules apply to issuers False
A _____________ shows the yeild to maturity on a tombstone advertisement offering scale
Competitive bidding is appropriate for what bonds only? GO bonds. Corporate bonds are standby
Bond Buyer publication For underwriters only. 25 Revenue bonds with 30+ years to maturity.
GO11, GO20, GO40 mature in ________ years 20.
A broker's broker never never acts in a principal transaction. It acts on an Agency Basis
True or false: Subject/Nominal quotes are given for informational purposes only True
Current yeild formula current yield = nominal yield/current market price
Gross Revenues pledge formula revenues/debt service
Net revenues pledge formula revenues - expenses/debt service
municipal bond insurers include all of the following except: MBIA, AMBAC, FGIC, FDIC FDIC
Taxable Bond Yield Formula Taxable Bond Yield = Municipal Bond Yield/1-T
MSRB rules apply to who? broker dealers, registered reps, underwriters. Do not apply to issuers
Who enforces MSRB rules? FINRA, comptroller of currency, the fed, FDIC, SEC
According to MSRB, what are the guidelines concerning opening accounts for employees of other firms? Written notice must be sent to firm, copies of confirmations must be sent to employer, order does not need to be authorized
True or false: Current Yield = Basis True
True or False: Nominal Yield = Basis False
Created by: cstrom