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Debt > Municipal Debt > Flashcards

Municipal Debt Flashcards

1
Q

Municipal tax status

A

Exempt from federal taxes, subject to state and local unless purchaser is from the same state

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2
Q

What is millage?

A

Way to assess property tax; one mill = .001%; same as $1 for every $1000 in value

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3
Q

CAB

A

Capital Appreciation Bond - zero coupon bond that allows for more debt limit since the principal is considered the discounted amount

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4
Q

COP

A

Certificate of Participation - security that pledges revenue of a project to pay interest. Not a GO bond

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5
Q

IDB

A

Industrial development bond

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6
Q

BAB

A

Build America Bonds; Gain a 35% interest rate credit from federal govt; only usable for infrastructure improvments

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7
Q

BAN

A

Bond anticipation Note - issued to start capital projects, paid off with a later long term bond issue

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8
Q

CLN

A

Construction Loan Notes - used for housing projects

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9
Q

TAN

A

Tax Anticipation Note

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10
Q

RAN

A

Revenue anticipation note - anticipating future revenue other than ad valorem taxes, such as construction grants

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11
Q

TRAN

A

Tax and Revenue Anticipation Note

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12
Q

GAN

A

Grant Anticipation Note

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13
Q

ETM

A

Escrowed to maturity; way to open up more of debt limit by placing government securities in escrow to cover payments of outstanding debt

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14
Q

Equivalent Taxable Yield

A

Tax Free Yield/(100%-Tax bracket)

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15
Q

Equivalent Tax-Free Yield

A

Taxable Yield * (100%-Tax bracket)

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16
Q

Firm Quote

A

Price a dealer will honor while selling

17
Q

Nominal Quote

A

An idea of the price, but not an actual price

18
Q

Municipal Workable

A

Likely price at which a deal will buy bonds, but not a firm big

19
Q

What requirements are there for listing bonds in Bloomberg?

A

Must be “bona fide” - dealer must have been willing to sell securities at the prices the time the offer was made. Not required to own the actual securities

20
Q

EMMA and Bloomberg vs Munifacts and Daily Bond Buyer

A

EMMA and Bloomberg cover secondary market; Munifacts and Daily Bond Buyer cover primary

21
Q

Optional redemption

A

Issuer has the right to call bonds after a certain date

22
Q

Mandatory redemption

A

Issuer required to call bonds on a schedule

23
Q

Extraordinary optional redemption

A

Issuer can call bonds if an unusual event occurs; example would be mortgages being repaid on a revenue bond

24
Q

Extraordinary mandatory redemption

A

Issuer must call bonds if unusual event happens; example: project is canceled; also known as a catastrophe call

Debt (5 decks)

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