The Fundamentals of Municipal Bonds

by Unknown
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  • Edition: 6th
  • Format: Hardcover
  • Copyright: 12/6/2011
  • Publisher: Wiley
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The definitive new edition of the most trusted book on municipal bonds As of the end of 1998, municipal bonds, issued by state or local governments to finance public works programs, such as the building of schools, streets, and electrical grids, totaled almost $1.5 trillion in outstanding debt, a number that has only increased over time. The market for these bonds is comprised of many types of professionals-investment bankers, underwriters, traders, analysts, attorneys, rating agencies, brokers, and regulators-who are paid interest and principal according to a fixed schedule. Intended for investment professionals interested in how US municipal bonds work, The Fundamentals of Municipal Bonds, Sixth Edition explains the bond contract and recent changes in this market, providing investors with the information and tools they need to make bonds reliable parts of their portfolios. The market is very different from when the fifth edition was published more than ten years ago, and this revision reasserts Fundamentals of Municipal Bonds as the preeminent text in the field Explores the basics of municipal securities, including the issuers, the primary market, and the secondary market Key areas, such as investing in bonds, credit analysis, interest rates, and regulatory and disclosure requirements, are covered in detail This revised edition includes appendixes, a glossary, and a list of financial products related to applying the fundamentals of municipal bonds An official book of the Securities Industry and Financial Markets Association (SIFMA) With today's financial market in recovery and still highly volatile, investors are looking for a safe and steady way to grow their money without having to invest in stocks. The bond market has always been a safe haven, although confusing new bonds and bond funds make it increasingly difficult for unfamiliar investors to decide on the most suitable fixed income investments.

Author Biography

The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks, and asset managers. SIFMA's mission is to support a strong financial industry, investor opportunity, capital formation, job creation, and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, DC, is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit www.sifma.org.

Table of Contents

Prefacep. ix
Writer's Acknowledgmentsp. xi
Overview of the Municipal Bond Marketp. 1
Introductionp. 1
The Issuersp. 4
Municipal Bond Dealersp. 7
The Lawyersp. 10
Financial Advisors, Specialists, and Other Consultantsp. 11
The Rating Agenciesp. 12
Bond Brokersp. 13
The Credit Enhancersp. 13
The Trustees and Paying Agentsp. 17
The Investorsp. 17
Information and Technologyp. 18
The Regulatorsp. 19
Other Participantsp. 21
The Basics of Municipal Securitiesp. 23
Description of Municipal Securitiesp. 23
Yield and Pricep. 26
Types of Yieldsp. 28
Tax Exemption of Municipal Bondsp. 29
Types of Municipal Bondsp. 35
Short-Term Securitiesp. 36
Other Characteristics of Municipal Bondsp. 45
The Issuersp. 55
Introductionp. 55
Authorities and Special Districtsp. 56
The Theory of Municipal Debt: Pay-As-You-Use versus Pay-As-You-Gop. 57
The Uses of Municipal Debtp. 59
The Security for Municipal Bondsp. 61
The Financing Processp. 68
The Financing Documentsp. 71
Structuring the Debtp. 81
State and Local Government Accountingp. 87
The Primary Marketp. 93
Issuance Trends in the Primary Marketp. 93
The Basics of Underwritingp. 96
Negotiated Underwritingp. 101
Competitive Underwritingp. 105
Orders and Proceduresp. 111
The Secondary Marketp. 117
Introductionp. 117
The Over-the-Counter Marketp. 117
E-Commerce, Information, and Technologyp. 119
Selling Municipal Bondsp. 121
The Basics of Municipal Bond Tradingp. 123
Municipal Bond Tradingp. 124
How a Trade Is Donep. 128
Municipal Futuresp. 130
Providers of Data in the Municipal Marketp. 131
Market Statistics and Indexesp. 132
MSRB Record-Keeping Rulesp. 136
Investing in Bondsp. 139
Introductionp. 139
The Basic Principles of Investing in Bondsp. 139
Measures of Yield and Returnp. 143
Yield to Maturity and Pricep. 145
Investment Objectivesp. 147
Risk Factorsp. 148
Investor Strategiesp. 150
Taxation of Municipal Bondsp. 152
Other Investment Factorsp. 161
Investor Categoriesp. 163
Credit Analysisp. 173
Introductionp. 173
The Rating Agenciesp. 175
The Rating Processp. 176
General Obligation Bondsp. 179
Revenue Bondsp. 197
Other Factors Affecting Creditp. 207
Understanding Interest Ratesp. 211
Introductionp. 211
Determinants of the Overall Level of Interest Ratesp. 212
Term Structure of Interest Ratesp. 216
Municipal Bond Ratesp. 221
Regulatory and Disclosure Requirementsp. 225
Introductionp. 225
The Basis of Federal Tax Exemptionp. 226
History of Federal Tax Legislation Affecting Municipal Securitiesp. 228
The Current Statutory Exemptionp. 230
Application of Federal Securities Laws to Municipal Securitiesp. 233
The Municipal Securities Rulemaking Boardp. 239
Financial Productsp. 247
Introductionp. 247
Interest Rate Swapsp. 247
Interest Rate Caps, Floors, and Collarsp. 252
Other Swap Productsp. 253
Managing the Asset Sidep. 253
Credit Default Swapsp. 254
Appendix Municipal Securities Rulemaking Board Rule G-33p. 257
Glossaryp. 265
Bibliographyp. 283
Web Sitesp. 283
Books and Publicationsp. 284
About the Writerp. 285
Indexp. 287
Table of Contents provided by Ingram. All Rights Reserved.

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