What Is the Blue List?
The blue list is a daily listing of bonds, mostly of the tax-exempt municipal variety, that are currently for sale by banks and dealers who represent the offerings.
- The blue list is a daily listing of bonds currently for sale by banks and dealers who represent the offerings.
- Two main kinds of municipal bonds that would appear on a blue list are general obligation and revenue bonds.
- The electronic blue list includes information such as the name of the bond issuing authority, CUSIP, par value, coupon rate, and YTM.
Understanding the Blue List
The printed version of the blue list included mainly tax-exempt municipal debt securities. Then, as now, these investment products have basic terms defined, such as the notional amount, interest rate yields, and maturity date. Typically their classification is from their level of default risk, the type of issuer, and income payment cycles.
There are two main kinds of municipal bonds that would have appeared on a blue list.
- A general obligation bond (GO) is issued by governmental entities, but not backed by revenue from a specific project. An example would be a GO bond to fund the construction of a toll road. Dedicated property taxes back some GO bonds while others are payable from general funds.
- A revenue bond secures principal and interest payments through the issuer or sales, fuel, hotel occupancy, or other taxes. When a municipality is a conduit issuer of bonds, a third party covers interest and principal payments.
Electronic Blue List
Historically, a bond's quality rating did not appear on the blue list. Since these listings are now available electronically, this information may now appear depending on the platform in use. Information on the electronic blue list available to investors today include:
- The name of the bond issuing authority, such as the corporate or state, municipality, or county agency
- The CUSIP number is a unique identification symbol assigned to all stocks and registered bonds in the United States and Canada.
- The coupon rate for the investment is the annual rate of interest paid on the face value of the bond, shown as a percentage. For example, a 5% coupon rate means that bondholders will receive 5% x $1,000 face value = $50 every year.
- The face value, also known as par value, is the amount paid to a bondholder at the maturity date, provided that the issuer does not default or call the bond early.
- The date of maturity for the investment is the day the bond matures and the issuer pays the bondholder the face value of the investment.
- The yield to maturity (YTM) of the bond is an estimate of what an investor will receive if holding the bond to its maturity date.
- The reason for issuance of the debt security, such as the construction of a new bridge or to raise revenue for schools
- The name of the bank or dealer offering the bond