Municipal Securities - Long Term Munis

There are three main classes of long-term munis:

  1. General obligation (GO) bonds are secured by the full faith, credit and taxing power of the issuer.

  2. Revenue bonds are secured by the full pledge of specific revenues, such as revenue from water bills, airport gate charges or turnpike tolls.

  3. Industrial development revenue bonds (IDRBs) are issued through a local governmental agency on behalf of a private business, and proceeds are intended to build or acquire factories or factory tools, which have the effect of improving the employment prospects in the local area. The debt service on the bonds is paid solely by the company.

GO and revenue bonds are used much more often than the highly specialized IDRBs. All levels of municipal government use revenue bonds, but only states, counties, cities and school districts put their full faith and credit behind GOs.

Issuer Types of Debt Generally Issued
State governments GO and revenue
Cities GO and revenue
Counties GO and revenue
Public school districts GO and revenue
Colleges and universities GO and revenue
Public power authorities Revenue
Water/sewer authorities Revenue
Transit authorities Revenue
Health facilities Revenue
Student loan agencies Revenue
Housing authorities Revenue
Waste disposal districts Revenue
Source: Federal Reserve Bank of Richmond (Va.).
Short Term Munis


Related Articles
  1. Professionals

    5 Reasons Financial Advisors Still Choose Mutual Funds

    Take a look at five primary reasons why financial advisors still choose to recommend mutual funds over other types of investment vehicles.
  2. Professionals

    The Basics of Financial Securities Licenses

    The Financial Industry Regulatory Authority (FINRA) offers several licenses that correspond to specific businesses or investments.
  3. Your Practice

    CFA Vs. Series 7: Which is Easier

    Find out which is exam is easier: The Chartered Financial Analyst (CFA) exam, or the Series 7 securities exam for registered representatives.
  4. Professionals

    Internal Advisor Consultant: Career Path & Qualifications

    Discover more about the responsibilities of an internal advisor consultant, the average salary he can expect and the qualifications he will need for the job.
  5. Brokers

    Broker-Dealer Industry 101: The Landscape

    Independent broker-dealers are a great choice for experienced, self-starter planners who have established practices.
  6. Personal Finance

    RIAs and Brokers: What's the Difference?

    RIAs and brokers are held to different standards when providing investment advice. Here's how they differ.
  7. Trading Systems & Software

    Steps to Starting Up an Independent Broker Dealer

    Launching your own broker-dealer is a lot of work, but the potential payoff is great, both personally and financially.
  8. Professionals

    How To Answer Option Questions On The Series 7 Exam

    Learn how to answer option questions on the Series 7 exam. Pass your Series 7 exam with the help of these tips.
  9. Professionals

    Series 55

    FINRA Series 55 Exam Guide
  10. Professionals

    Series 62

    FINRA Series 62 Exam Guide
RELATED TERMS
  1. No results found.
RELATED FAQS
  1. Do financial advisors need to pass the Series 7 exam?

    Learn about the various securities licensing exams, such as the Series 7 exam, and which licenses are required for financial ... Read Answer >>
  2. Do financial advisors have to be licensed?

    Understand why all financial advisors have to be licensed, and identify the specific licenses you must obtain to carry out ... Read Answer >>
  3. What are the differences between the Series 6 exam and the Series 7 exam?

    Learn about the regulatory exams needed to become a limited or registered representative and the main differences between ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center