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

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