What is a municipal syndicate?
The people who come together to sell muni bonds to the public. When a local or state government decides to issue bonds, they hire a bunch of underwriters or an underwriting firm (syndicate) to handle all the dirty work.
What is a municipal offering?
Municipal bonds (or “munis” for short) are debt securities issued by states, cities, counties and other governmental entities to fund day-to-day obligations and to finance capital projects such as building schools, highways or sewer systems.
Which of the following actions must be taken if a municipality wishes to raise its debt limit?
If a municipality wishes to raise its debt limit, the voters must approve via a public referendum. In effect, the voters are approving an increase in their taxes when they approve such a measure.
Which of the following municipal bonds would most likely be refunded by the issuer?
The callable bond with the highest coupon rate is most likely to be refunded. This would save the issuer the most money over the long term.
Who puts covenants in revenue bonds?
Covenants are often put in place by lenders to protect themselves from borrowers defaulting on their obligations due to financial actions detrimental to themselves or the business. All bond covenants are part of a bond’s legal documentation and are part of corporate bonds and government bonds.
Do municipal bonds have covenants?
Because municipal bonds are exempt from federal regulations, trust indentures go a long way in protecting bondholders, and are hence sometimes referred to as “protective covenants.”
Who can issue municipal bonds?
Municipal bonds (“munis”) are debt securities issued by state and local governments. These can be thought of as loans that investors make to local governments, and are used to fund public works such as parks, libraries, bridges and roads, and other infrastructure.
Who holds municipal bonds?
Most state and local bonds are held by households, followed by mutual funds (which also represent household investors) (figure 3). Banks and life insurance companies used to be more prominent municipal bond holders until the Tax Reform Act of 1986 and subsequent litigation limited the advantages of doing so.
Who guarantees an industrial development bond?
Industrial revenue bonds (IRB) are municipal debt securities issued by a government agency on behalf of a private sector company and intended to build or acquire factories or other heavy equipment and tools. IRBs were formerly called Industrial Development Bonds (IDB).
Which of the following are true regarding municipal bonds offered out by one dealer to another?
Which of the following are TRUE regarding municipal bonds offered out “firm” by one dealer to another? The best answer is C. A quote offered out “firm” means that the selling dealer will not change the price for the time period specified.
Which of the following municipal bonds would probably be refunded?
Which of the following municipal bonds would probably be refunded? The callable bond with the highest coupon rate is most likely to be refunded. This would save the issuer the most money over the long term.
What will back a municipal revenue bond?
A revenue bond repays creditors from income generated by the project that the bond itself is funding, such as a toll road or bridge. While a revenue bond is backed by a specific revenue stream, holders of GO bonds are relying on the full faith and credit of the issuing municipality.