Bond Counsel

During an offering of municipal bonds, the issuer will retain legal counsel to represent them in the transaction. The bond counsel will:

  • Confirm that the issuer is legally allowed to issue the bonds.
  • Confirm that the debt is a legally binding obligation of the issuer.
  • Ensure that the issue has been properly announced.
  • Ensure that the bond certificates have been legally printed.
  • Issue a legal opinion.

The Legal Opinion

The legal opinion is issued by the independent bond counsel. It states that the bonds are a legally binding obligation of the issuer and that the bonds may be legally offered for sale by the issuer. The legal opinion will also attest to the tax treatment of the interest payments received by investors who purchase the municipal bonds. An unqualified legal opinion is the most desirable for investors. An unqualified legal opinion means that the bond counsel has no reservations whatsoever regarding the issue. Should the bond counsel issue a qualified legal opinion, it indicates that there are some concerns regarding one or more of the statements in the legal opinion. The legal opinion must be attached to every municipal bond certificate. The only exception to this is if the bond has been identified as being traded “Ex legal”.  A bond could be traded Ex legal if there never was a legal opinion issued, as is the case with most smaller issues. A municipal bond can also be identified as being ex legal if the legal opinion was lost.  


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