Callable Bond

A bond whose issuer has the right to redeem before the maturity date. When a bond is callable, the issuer will typically redeem the bond at par amount.

Coupon Rate

The rate of interest paid periodically to holders of fixed-income securities. Coupon rate payments will vary depending on a number of factors, including risk, interest rates, and par amount.

General Obligation Bonds

Bonds issued by a state or local governments payable from general funds of the bond issuer. The exact source and prioritization of payment for general obligation bonds will often vary between issuers depending on the prevailing state or local law. GO bonds issued by states are payable from revenues available to the state generated by sales, income, or other taxes levied by the state. In some instances, these revenues can be subject to annual appropriation, or can be defined as “deemed appropriated” revenues, for which no legislative action is required to be taken.

Maturity Date

The date at which the par amount of a security is to be paid to the holder.


A short-term debt security with a stated interest rate. Notes will typically have a maturity period of under a year, although notes with maturity periods longer than a year can be issued. Some common types of notes within the municipal market include: BANs, RANs, TANs, and TRANs.

Par Amount

The principal value of a security that is to be paid at maturity.


A process by which an issuer refinances outstanding bonds through the issuance of new bonds. Bonds may be refunded for a variety of reasons. Many times, an issuer will look to achieve debt service savings on their outstanding debt through a refunding.

Revenue Bonds

A type of bond whose coupon rate payments are derived from a specific source of revenue. Typically, the payments are generated from the project, facility, or operation that the bonds finance, such as a toll over a bridge, a new sports stadium, etc. Revenue bonds are not backed by the ability of the issuer to levy taxes, which is typically the case for GO bonds.


The annual rate of return generated on a security based on the purchase price, the coupon rate, and the length that the security is held. The yield of a municipal security moves inversely to its price. A municipal bond’s yield is determined by several factors, including rating, credit enhancement, credit spreads, maturity, and call features.

Competitive Underwriting

An underwriting process in which underwriters submit bids at a specified time to purchase a new issue of municipal securities. The underwriter that provides the lowest interest rate cost as per the terms of the sale is awarded the new issue, if accepted.

Negotiated Underwriting

A method of sale by which an issuer selects either an underwriter or underwriting syndicate to bring a new issue to market. The interest rates, call features, purchase price, and other structural points of the issue are negotiated during the sale process.

See Glossary of Municipal Securities Terms ( for additional information.