What are the different types of municipal bonds?

There are two major types of municipal bonds: “general obligation bonds” and Investor Assistance (800) 732-0330 www.investor.gov Page 2 “revenue bonds.” Because these types come in many varieties, you should look beyond the short-hand label when deciding whether to purchase.

What information is available on MuniPOINTS?

The most popular DPC DATA information product, MuniPOINTS documents are concise, descriptive summaries of municipal bond issues. They include bullet-pointed text, extracted directly from the official statements, with no analytic content. Indexed by CUSIP, MuniPOINTS fact sheets are quick to access.

What type of investment are municipal bonds?

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.

What is a municipal securities principal?

Municipal Securities Principals can underwrite, trade, and buy or sell municipal securities. The exam also permits the holder to render financial advisory or consultant services to issuers of municipal securities, as well as permits communications with customers about the aforementioned activities.

What is the major difference between municipal bonds and other types of bonds?

The primary difference between municipal bonds, also known as “munis,” and money market funds is that municipal bonds are single bond issues from local or state governments, while money market funds are a type of mutual fund that invests in very-short term Treasuries issued by the federal government.

What is the difference between issuer and obligor?

Issuer: The party or vehicle that issues the debt. An Issuer can borrow for itself or as a conduit for another entity. Obligor: The “credit” behind a deal – the ultimate source of payment of principal and interest. An Obligor may be a legal entity or a specific revenue stream.

What is an insured bond rating based on?

Bond ratings are based on the credit of the insurer rather than the underlying credit of the issuer. A municipal bond insurance policy is intended to result in significant interest cost savings, depending upon the issuer’s underlying credit and market conditions at the time of the bond sale.

What are general obligation bonds backed by?

Instead, they are backed by the “full faith and credit” of the issuer. In simple terms that means the bonds are backed by the state or local government’s ability to tax, and to raise taxes if necessary, in order to pay bondholders. For states, this power comes in the form of state income taxes and/or a sales tax.

Who are the primary investors in municipal bonds?

According to the Federal Reserve, individual households (individual investors), mutual and money market funds, life insurance companies, property and casualty insurance companies, closed-end investment funds, commercial banks, and foreign investors are the most common holders of municipal bonds.

What is an example of a municipal bond?

A municipal bond is a debt security that has been issued by a local government entity. Examples of these issuers are state, county and city governments. Municipal bonds are commonly used to fund the construction of roads, schools, airports, hospitals, wastewater treatment facilities and other infrastructure projects.