Municipal bond

(redirected from local government)
Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.
Related to local government: department of local government

Municipal bond

State or local governments offer muni bonds or municipals, as they are called, to pay for special projects such as highways or sewers. The interest that investors receive is exempt from some income taxes.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

municipal bond

The debt issue of a city, county, state, or other political entity. Interest paid by most municipal bonds is exempt from federal income taxes and often from state and local taxes as well. The tax exemption stems from the use to which the funds from a bond issue have been devoted. Municipal bonds with tax-exempt interest appeal mainly to investors with significant amounts of other taxable income. Also called muni, municipal, tax-exempt bond. See also Bond Buyer's Index, ex-legal, 501(c)(3) bond, general obligation bond, revenue bond, taxable municipal bond.
Case Study Municipal debt, like corporate debt, ranges in credit quality from investment-grade to very speculative. On November 9, 2001, bond trustee State Street Bank and Trust informed holders of $9.7 million of bonds issued by Marineland Foundation, a nonprofit corporation established by the city of Marineland, Florida, that they would receive $245 for each $1,000 of principal amount. Unfortunately for bondholders the debt was being repaid at slightly less than 25¢ on the dollar. The unrated Marineland bonds had been issued at yields of 8.5% in 1995 to institutional investors and remarketed in 1996 to individuals. Funds raised from the bond issue were used to purchase one of Florida's oldest tourist attractions. Opened south of St. Augustine, Florida, in 1937 as an underwater movie studio, Marineland opened to the public with dolphin and sea lion shows one year later. Attendance suffered beginning in the 1970s following the opening of Disney World, Sea World, Universal Studios, Circus World, and a host of other bigtime Florida attractions. Revenues at the refurbished oceanside aquarium proved too small to cover variable and fixed expenses, including interest on the debt. Marineland had been sold yet again at the time the agreement was reached with bondholders. The new owners intended to promote the attraction as a research resort where visitors could scuba-dive, hike, and learn about marine life.
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.

Municipal bond (muni).

Municipal bonds are debt securities issued by state or local governments or their agencies to finance general governmental activities or special projects.

For example, a state may float a bond to fund the construction of highways or college dormitories.

The interest a muni pays is usually exempt from federal income taxes, and is also exempt from state and local income taxes if you live in the state where it was issued.

However, any capital gains you realize from selling a muni are taxable, and some muni interest may be vulnerable to the alternative minimum tax (AMT).

Munis generally pay interest at a lower rate than similarly rated corporate bonds of the same term. However, they appeal to investors in the highest tax brackets, who may benefit most from the tax-exempt income.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
He also stated that some PTI local government representatives expressed reservations on the interference of the provincial and national assembly members but they too had to step back since they could not confront the party leadership.
The subject of the letter is 'estimated resources to be transferred to the local governments for the financial year 2019-20'.
'The verification was necessitated by the inability of nine local governments of Akwanga, Nassarawa-Eggon, Kokona, Karu, Doma, Obi, Toto, Nasarawa and Lafia, to pay June salaries in spite of receiving allocation directly from the Federal Government.
Then-prime minister Tunku Abdul Rahman had promised the Dewan Rakyat that local government elections would be restored once the Confrontation was over, but this did not happen despite the end of Confrontation just one year after the third vote was suspended.
Third, now that the Constitution commands (not simply permits) the provinces to 'establish' local governments, how can they get away with doing the very opposite: dissolving local governments and reclaiming powers already devolved?
The entire Local Government Act is full of legal provisions to tighten provincial control over the local governments.
The old structure of local government was designed for managing the civil war and for ensuring political control over rural communities, which discouraged policy consultation and citizen engagement.
The Minister for Local Government Shehram Tarakai said that Tehsil Council would be able to approve budget through simple majority, while local governments would be provided 30 percent of provincial developmental budget.
Under the new local government system, Neighbourhood Councils would be established besides raising the number of Metropolitan and Municipal Corporations in urban areas.
However, in spite of the fact, that the Local Governments, under pressure in democracy and over bearing in Martial Laws have been there, the need of the institution has always remained.
"Imran Khan wants the Balochistan government to cut unnecessary costs, eliminate corruption and also introduce an effective local government system," said Zulfiqar.
There are many things which contribute to this problem, such as overcrowding and unplanned expansion of the city, poor governance and lack of a proper local government system.

Full browser ?