Munis Flashcards
When yields are lower, prices are?
Higher
Who attests to the legality of a bond issue and issues a legal opinion new muni’s?
Bond council
What is a debt limit?
What is debt limit? The max amount a municiplaity can have OUTSTANDING
Difference better Eastern and Western account?
Western is divided responsibility. Each to own
Eastern is undivided. Part responsibility for other
how do issuers determine winning bid?
Subtract and premium from or add any discount to the totaly interest cost
Total takedown is made up of?
Concession and Aditional Takedown
How to work out mil tax?
Remove last two 0’s of Assessed Value. Then X by multiple numbers of mils
Double-barreled bonds
Have two sources of revenue to support them
How much of annual cost is deductible when banks purchase qualified muni’s?
80%
Which type of municipal bond issues is associated with a flow of funds?
Revenue bonds.
Which bonds are backed by user fees (project earnings) and are generally low risk?
Revenue bonds
Which factors would be considered in analyzing the credit worthiness of a revenue bond?
Debt service ratio and Management
Which type of tax does overlapping debt refer to?
Property
What is the order of priority in group orders syndicates?
Presale
Net designated
Members
Whch bonds may be included in AMT?
Industrial revenue bonds
What is a MIG Rating?
Short term notes (Revenue anticpation notes)
The reoffering yield
The yield that bonds are offered to public
Brokers Broker
Act as agents in trades between dealers and institutions
Syndicate determines amount for a new issue
Reoffering price minus the spread
A notice of sale
Is published to provide syndicates with information on proposed new (primary market) issues
Which taxes to municipalities get their revenue taxes from? Property (Ad valorem), sales, income, gasoline etc
What does flow of funds relate to? Revenue bond offerings - priority of disbersing project revenues
In what order are distributions paid under a net revenue pledge?
(1) operating and maintenance expenses
(2) debt service
(3) debt service reserve
(4) surplus
What does the placement ratio show?
The relationship between the number of bonds sold and the number for sale
What does a dealer concession quote of ½ (0.5%) to another dealer mean?
A discount from the yield that the broker/dealer is quoting. e.g $5 per 1,000 of par
What does the Bond Buyer Revdex consist of?
25 revenue bonds with 30 year maturities.
GO Index
20 bonds, 20 year maturity
GO Muni Bods are backed by
The full taxing power of the muni
How is tax-free equivalent yield calculated?
Corporate rate x (1- investor tax bracket) e.g 9% (0.9) X (1- 0.32) = 0.612 (6.12%)
ID (ind dev) bonds are backed by:
The full faith of the corp / not the muni
Qualified legal opinion
Legal - but contingencies may limit flow of funds
Unqualified legal opinion
Without qualifying limitations
All muni bonds are issued in which forms:
Book-entry form and Fully registered form
