New Issues - Municipal Underwritings Flashcards
Muni GO bonds are generally required to be sold on a ______ basis
competitive bid
Revenue and industrial rev bonds are usually sold on a _______ basis
negotiated
In order to issue, a municipality first contacts its _____ and _____
financial adviser and bond counsel
The bond counsel will draw up the _____ contract, the ________, and render an ______
bond contract, the trust indenture, and render an opinion
To solicit bids, the municipality publishes a ________
Offer of Notice of Sale
The Net Interest Cost is the ______
arithmetic mean of the interest rates - lowest one wins
True Interest Cost is a pricing method that takes into account the ______
present value of each interest payment
A good faith check for a muni issue is typically ____ of the issue amount
2%
The issuer is responsible for providing the _____ and ____ copies of the _______
legal opinion, and 500 copies of the “Official Statement” (ie a prospectus)
Bond years =
number of bonds * years to maturity
Years Avg Life =
Total Bond Years / Total Number of Bonds
In an “Eastern” muni syndicate, if there are remaining bonds to be sold, each member is responsible for_____
their % share of the remainder - doesn’t matter if they sold all their allotment
Total Interest Paid by Municipality =
bond years x interest rate (for each maturity, then summed)
Net Interest Cost (for Munis) =
Total interest -/+ premium/discount / bond years
Pre-sale orders are handled first and are filled at the “Net” price (the reoffering price). T/F
True
