Municipal Analysis and Pricing: Rapid Fire

What this video covers

• How to distinguish general obligation (GO) bonds backed by taxing power from revenue bonds backed by user fees, and which ratios apply to each
• Why declining population or property values worsen GO debt ratios, and why overlapping debt excludes state debt
• The 1.25x adequate coverage standard for utility revenue bonds versus 2.0x for standard revenue bonds, and why essential services get a lower bar
• How gross pledge puts bondholders first while net pledge pays operations and maintenance (O&M) before debt service
• Why premium amortization walks basis down to par while original issue discount (OID) accretion walks basis up, and which adjustments are tax-free
• The taxable equivalent yield (TEY) formula (tax-exempt yield divided by 1 minus marginal tax rate), and why dividing by a fraction produces a larger number
• Which bonds trade flat (defaulted bonds, income bonds, zero-coupon bonds), and why the entire market discount becomes ordinary income once the de minimis threshold is crossed