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Related to munis: Municipal bonds

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


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 ?
Here's how the House and Senate bills that could impact the muni market:
Even though an aggravated life sentence was originally sought, Ankara's 1st High Criminal Court decided to punish Munis with a life sentence on Nov.
Totaling $3.7 trillion at the end of 2013, with approximately $400 billion in new issuance every year, the muni market is roughly one-third the size of the U.S.
Tom Huber, Sioux Falls' assistant director of finance, said, "With Munis, we intend to create a dynamic business environment that utilizes Munis' dashboards and intuitive workflow to provide real-time access to data that will dramatically enhance productivity for city employees, vendors and citizens.
However, Orman added that with the help of a broker, it's still possible to find an inexpensive tax-free or low-tax muni.
"Investors should not look to munis as a safety valve against any anticipated federal tax increase next year," Sowanick added.<br /> "An increase in the federal tax rate will dilute the already precious income levels of US employees, which will have a negative impact on consumption, and therefore retail tax receipts."
Assuming you are subject to the top federal rate, 31 percent, you would have to find a CD yielding more than 10 percent to give you an equivalent after-tax yield higher than the state's 6.4 percent munis.
A plan that involves new, large issues of municipal bonds would likely damage the market by flooding it with more supply, but a plan involving tax credits for private companies, which has been suggested by Trump, may not necessarily be positive for munis.
Matanuska-Susitna Borough Schools has chosen financial management, human capital management, self service and content management applications from the Munis ERP solution.