Municipal debt

What bonds were meant to create jobs and make to it easier for municipalities to access the debt market for needed capital projects.

"BAB" Build America Bond

These are used by municipalities to "pull forward" federal grant monies that are received to support mass transit improvements in cities, pollution control facilities and energy conservation infrastructure.

"GAN" Grant Anticipation Note

To smooth out tax collections, a municipality will issue a ____________.

"TAN" Tax Anticipation Note

New issues of municipal notes are available only in ____________.

"book entry" form

A municipality would NOTdefease its debt with __________ Corporate securities.

AAA Corporate securities

The ____________________ is the contract between the issuer and the bondholder.

Bond Resolution

The ____________ ratio is the MOST difficult to evaluate because municipalities differ in the method of computing property values.

Debt to assessed value

From an issuer's standpoint, level debt service serial bonds have _________ interest payments equally offset by rising principal repayments.

Declining interest payments and rising principal repayments.

Extraordinary calls are due to _______________ events.

Extraordinary

The only debt that can be overlapping is ______________.

G.O. debt

Level debt service is best described as principal repayments ___________ as the years progress.

Increase

Ultimate payment of debt service on moral obligation bonds is dependent upon _________.

Legislative apportionment

A municipality is at its statutory debt limit and cannot legally issue more debt backed by taxing power, what bonds would be issued?

Moral obligation bonds

For a municipal bond issue that is advance refunded the funds to pay debt service requirements are deposited to an escrow account and used to buy ____________.

Municipal securities

Net Direct Debt and Overlapping Debt equals ______________.

Net Overall Debt

The most commonly used measure to evaluate the ability of a revenue bond issuer to pay interest and repay principal is the ratio of _________________.

Net Revenues to Debt Services

__________________ debt is considered in a General Obligation bond analysis.

Overlapping

To smooth out cash flow, a municipality will issue all of the following

RAN TAN TRAN

A municipal term bond is issued with a mandatory sinking fund. At the first call date, bonds to be called are selected by ____________________.

Random Choice

Regarding the flow of funds set forth in a municipal bond contract, collected monies would FIRST be deposited to the _______.

Revenue Fund

________________ limits do not apply to revenue bonds because they are self-supporting debts

Statutory debt

A municipal quote which is used to get an indication of a likely price at which a dealer will buy bonds is known as a _______________.

Workable quote

A Double Barreled bond is a revenue bond that is additionally backed by that municipality's __________ so it is safe.

ad valorem taxing power

A bond issue is likely to have a mandatory sinking fund provision if it is perceived to be somewhat risky causing potential purchasers to demand this ____________.

additional safeguard

A municipal "covenant of defeasance" allows the issuer to "____________" the bond issue under the terms specified in the bond contract.

advance refund

Municipal Broker's broker acts as a _________.

agent

Commercial paper cannot be used for long term financing such as a ______________.

bond refunding

The ___________ covenant is the promise to maintain proper recordkeeping of accounts.

books and records

A promise by a municipality to call in a bond issue if the facility built with the proceeds of the offering is condemned, is a __________.

calamity call covenant

he flow of funds details the priority of ____________ pledged revenues.

collecting and disbursing

A municipal bond that has a put option is protected against depreciation due to _________ interest rates.

falling

Ad valorem taxes backs ___________ bonds

general obligation

Municipal broker's brokers do not deal with the ___________.

general public

When an issuer refinances an outstanding debt issue, the bonds which are MOST likely to be refunded by the issuer are bonds with the ___________ interest rates and ___________ call premiums.

highest interest rates and lowest call premiums

For a municipal bond issue that is advance refunded the marketability of the advance refunded bonds will _____________.

increase

A debt obligation issued by a municipality for the benefit of a corporate user is a(n):

industrial development bond.

Periodic deposits of monies to the sinking fund are required to cover required ___________.

interest and principal payments

COPs are backed by a pledge of ___________.

lease revenues

A municipal variable rate demand note is a _________ municipal security because it has no stated maturity, but it is issued at _________ (lower) interest rates.

long-term but issued at short-term interest rates

Variable rate municipal notes avoid "interest rate risk," also known as __________ risk.

market risk

A __________ quote is really no quote - it is simply an approximate price

nominal

Revenue bond rate covenants usually require that rates be set at a level sufficient to cover __________ of the facility, as well as ___________.

operation and maintenance and debt service costs.

An "in whole call" is a(n):

optional call

Municipal bonds are traded in the ____________ market .

over-the-counter market.

Moral obligation bonds are backed by __________.

pledged revenues

Municipal ISSUERS offer bonds in the ________________.

primary market

Municipal variable rate demand notes have an interest rate that is ______________.

reset periodically

Engineer's reports are examined when evaluating a ___________ issue.

revenue bond

The ratio of pledged revenues to debt service requirements is used to evaluate the creditworthiness of a ____________ issue.

revenue bond

A "double barreled" municipal issue has a primary backing of a ___________ and a secondary backing of a ___________.

revenue pledge and secondary G.O. pledge

Moral obligation bonds are typically secured by _________.

revenues from a financed project

A ___________ bond is one which is used to fund an improvement that benefits only a segment of the population; and only those people are charged taxes to pay for that improvement.

special assessment

A municipal bond which funds an improvement that benefits only a small portion of the community is a __________ bond.

special assessment bond

A municipal bond which is secured by taxes other than ad valorem taxes is a ____________.

special tax bond

In the over-the-counter market, an approximate price quote from a dealer that is "subject" to confirmation or change, this is a _____________ quote.

subject quote

General obligation bonds are backed by faith, credit, and _____________.

taxing power of the issuer.

A municipal variable rate demand note is a municipal bond that gives the holder a ___________ feature, usually at par, as of the reset date.

tender option

An "additional bonds test" means that the issuer is prohibited from issuing new bonds against the revenues of a facility, unless __________.

the facility's revenues are sufficient.

Short sales of municipal bonds rarely occur because . . .

the trading market is thin, making short covering difficult

G.O. bonds are typically issued without a ____________.

trust indenture

The flow of funds for a municipal revenue bond offering is set forth in the ______________.

trust indenture

A municipal ______ is a likely price at which a dealer would buy/BID a bond from a customer.

workable