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28 Cards in this Set
- Front
- Back
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Taxation
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exempt from taxation unless bond is associated with a corporation
Capital Gains: are taxed |
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Issuers of Muni's
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Territorial possession of US
State Gov't Legally constituted taxing authorities |
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Coterminous
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Two taxing agencies that share the same geographic boundaries and are able to issue debt seperatly
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Double Barrelled Bonds
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Backed by more than one municipal revenue source
Bonds are backed by taxing power of the state |
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Mill
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1/1000
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Investment Advisor: duties
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GEM
Give advice Execute Trade Manage Accounts |
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Western Account
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Divided liabilities
The members in the syndicate are liable for the shares they are unable to sell. |
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Eastern Account
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Undivided liabilities
The members of the syndicate are liable as a group, any unsold shares will be divided throughout the firms in % involvement |
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Concession
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New Issue commision
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Statuary Debt Limits
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Restrict amount of GO debt a firm can have (NOT REVENUE bonds)
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Investment Advisor: duties
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GEM
Give advice Execute Trade Manage Accounts |
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Statuary Debt Limits
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Restrict amount of GO debt a firm can have
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Revenue Bonds
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Backed by user fees (ex:tolls)
Term Maturity Self Supporting Debt No voter approval required to form Flow of funds relates to the bonds |
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Special Tax
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Backed by user taxes such as tobacco
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PHA NHA
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Section 8 bonds
Safest bonds, as they are backed by the US gov't in full |
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Industrial Development Bond
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Issued by municipalities and leased by corporations
Since in part a corporation is involved interest is usually taxed |
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S-T municipal Instruments
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3 months to 3 years
Anticipations Notes |
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Ex- Legal
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Bonds that do NOT contain a legal opinion. If this is the case the underwriter must disclose this with the consumer in order for the sale to be carried out
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Underwriting Spread
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Compensation to the underwriters
1. Managers Fee 2. Additional Takedown 3. Concession |
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1 bond pt =
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$10
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Municipal Insurers
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Protect against credit risk (not market risk) Ex: MBIA, AMBAC
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MSRB
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Makes rules, but the rules are enforced by FINRA
All recomendations must be suitable No guarantees against loss Puts and Calls are OK Joint Accounts are OK |
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MSRB Customers Must Receive:
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1. Bond Price
2. Whether the firm is acting as an agent or principal 3. Accrued Interest 4. Address stated 5. Trade settlement date 6. Description of Settlement 7. Amount due at settlement 8. Time transaction is carried out |
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Regulations: Advertising, Customer Complaints,
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Advertising: hold records for 3 years and all must be approved by the principal. Principals must approve each trade as well as each customer complaint.
Customer complaints must be kept on record for 6 years. |
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Mark ups, mark downs, and commisions
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Must be fair and reasonable
Not necessarily applicable to the 5% rule on commissions in which other securities are |
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Official statement
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Is used to disclose all material information about the issuer an investor would need to know to make a decision regarding issue purchase.
Includes the issuers credibility Meets disclosure requirements for purchasers of the new issue. must include information about the offering's call provisions. (similar to a prospectus but not the same) |
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Bond Buyer Index
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Measures secondary market yields of GO bonds. It consists of 20 GO bonds, A-rated or better, each with approximately 20 years to maturity. The index is updated each week.
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official notice of sale
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Contains the information a syndicate needs to prepare a bid, including the amount of the good faith deposit the syndicate must submit with the bid. The delivery date has not been determined. The syndicate develops the yield for each maturity and the agreement among underwriters.
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