ABSTRACT
The Bond Buyer Municipal Bond Index (BBI) is a modified price-weighted index that tracks the twice-daily price only performance of long-term, high quality, actively traded, general obligation and revenue bonds that pay semi-annual interest at fixed coupon rates. Private placements and bonds with unusual or extraordinary features are excluded from consideration. No more than two bonds from the same issuer are included in the index. The index which serves as a short-term price-performance indicator of the municipal bond market, was created by the Chicago Board of Trade (CBOT) to be the basis for the Municipal Bond Index futures contract, and is designed to reflect current market conditions. Excluded from the index are called, retired, exchanged or upgraded issues, defaulted issues when their market value falls below US dollar 20.0 million for six consecutive months and non-defaulted issues with a market value below US dollar 50.0 million for six consecutive months.
