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7: 2 Munies & Options > 3 Info > Flashcards

3 Info Flashcards

1
Q

Issuing Muni Process

A
  1. issuer gets legal opinion
  2. terms set by

a. negotiated underwriting
b. competitive bid
3. Buyer publishes visual supply (# to be issued)

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2
Q

Visible Supply vs. Interest

A

visible supply high, interest high

visible supply low, interest low

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3
Q

Bond Buyer Indeses

40 Bond Index (BI)

20 Bond Index

11 Bond Index

Revdex 25

A
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4
Q

Thompson Muni Monitor

A

real time info

secondary mkt

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5
Q

syndicates

effect risk

A

spread risk of UW among

multiple UW

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6
Q

Average Life

(years)

A
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7
Q

Syndicate Letter or Contract

A

indicates agreement w/ terms

not legally binding till

syndicate submission of bid

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8
Q

Eastern Account

Western Account

A

undivided

pool UW then portion issued & unsold bonds

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9
Q

Eastern Account

Western Account

A

divided

ony responsible for own UW allocation

UW does not get others unsold bonds

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10
Q

Syndicate Bid

A

Low interest

competitive for public

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11
Q

Syndicate Bid

Compare bids

  • Net Interest Cost (NIC)
  • True Interest Cost (TIC)
A
  1. combines amt issuer rcvs w/ total int paid
  2. adjusted for time value (weighs early interest heavy
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12
Q

Syndicate Bid

Split-Rate Bid

A

vids w/ multiple int rates

determined by lowest ave int cost to issuer

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13
Q

Syndicate Bid

Settlement

A

30 days after issuer deliveries securities

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14
Q

Reoffering Price / Yeild / Scale

A

price bonds sold to public

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15
Q

Production

A

total dollars earned from sale

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16
Q

spread

A

production ($ earned from sell)

less amt bid to issuer

17
Q

Spread is

A

Profit

18
Q

concession

A

the selling group’s payment

19
Q

Added Take Down

A

syndicate payment

20
Q

reallowance

A

discount from reoffer

21
Q

MSRB

A

Municipal Securities Rule Making Board

  1. order allocation
  2. order period
  3. allocation priority
22
Q

MSRB

Allocation Priority

A

Outlined in syndicate Agreement

  1. Presale Orders - before syndicate wins bid
  2. Group Net - after bid awarded
  3. Designated Order - take down alloated to specific syndicate
  4. Member Order - member firm wants

Pro Golfers Don’s Miss

23
Q

Unqualified Legal Opinion

Qualified Legal Opinion

A

bond council found no problems

24
Q

Unqualified Legal Opinion

Qualified Legal Opinion

A

issue is legal

qualification necessary

because contingencies exist

7: 2 Munies & Options (9 decks)

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