Primary Financing for Municipal Securities

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Chapters in this video

  1. 0:00 Why a city issues municipal bonds
  2. 1:12 Competitive bidding and the notice of sale
  3. 2:46 NIC vs. TIC and time value of money
  4. 3:36 Negotiated sales and revenue bonds
  5. 4:34 MSRB pay-to-play and the two-year ban
  6. 5:22 Private placements and the liquidity trade-off
  7. 6:22 Rapid-fire exam recap

What this video covers

  • Why general obligation (GO) bonds pair with competitive sales and revenue bonds pair with negotiated sales, and the rare exceptions
  • What the notice of sale is, what it contains, and why it appears only in competitive deals
  • The difference between net interest cost (NIC) and true interest cost (TIC), and why TIC is the more accurate measure of the issuer's borrowing cost
  • Why a negotiated sale lets the underwriter pre-market the issue while a competitive bid does not
  • The Municipal Securities Rulemaking Board (MSRB) pay-to-play rule, the two-year ban, and the fact that it applies to negotiated underwritings only
  • How a private placement works, who buys the bonds, and the liquidity trade-off the investor accepts
  • The rapid-fire pairings the Series 7 loves to test from this unit

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