municipal

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Municipal Bond

A bond issued by a local or state government. Municipal bonds are usually used to raise capital for improvements in infrastructure or other aspects of the municipality. For example, a city or school district may issue a bond to build a new school or a new playground. Municipal bonds are exempt from federal income taxes and sometimes from state and local taxes as well. Municipals usually pay lower coupons than corporate bonds, but because the yield is tax-free, the after-tax basis may be higher for a municipal bond. Risk varies with the municipality and the particular type of municipal bond. It is sometimes called a municipal improvement certificate.
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municipal

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
"The first step," says Kathleen Stepp, a CPA and financial planner with Stepp & Bothwell, in Overland Park, Kansas, "is to determine whether your tax bracket is high enough to make municipal bonds appropriate.
Above that, tax brackets range from 28% to 39.6%, where municipal bonds may make sense.
One answer may be a diversified portfolio of government, municipal, and corporate bonds.
Given the vast array of bonds and bond products on the market, we recommend that many of our high-net-worth clients invest in a combination of municipal, high-yielding corporate, and government bonds.
(NYSE: IVZ) said it has made portfolio management changes for 10 of its closed-end municipal funds.
Invesco Municipal Income Opportunities Trust ?Invesco Municipal Opportunity Trust
Realizing their software had applications beyond mining, Pen has concentrated its efforts on the broader, less-volatile municipal market since restructurin in 1997.
Leith credits city officials such as Guido Mazza, George Morel and especially Bill Lautenbach, Sudbury's planning director, an acquaintance of Municipal Software president Rob Bennett, for paving the way for the partnership.
The municipal bond yield ratio for short-term bonds is normally smaller than for long-term bonds; the yield on municipal bonds with a one-year maturity averages only about 70% of the yield on comparable taxable bonds.
Further, the municipal bond yield ratios for 10- and five-year maturities are also higher than average at 84.1% and 78.2%, respectively.