ABSTRACT
This chapter focuses on municipal bonds, municipal notes, bond ratings, their implication for debt management, and the bond ratings process. Municipal bonds represent debt from a broad category of issuers, such as cities, counties, parishes, towns, boroughs, villages, and special districts. As of 1993, there were over one million municipal bonds, which make up the vast majority of a US municipal finance market valued at over $one trillion. The bonds fall into three broad categories: general obligation bonds, limited obligation bonds, and industrial development bonds. In conjunction with the municipal bond market are the municipal note and commercial paper markets. While the bond market is centered on long-term issues, the note and commercial paper markets represent short-term securities. With respect to financial analysis, bond rating agencies seem to view debt as a percentage of assessed property value as a measure of municipal "leverage".
