Municipal Note
Barron's Banking Dictionary:
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Municipal Note
Short-term debt instrument, generally with a maturity of less than one year, issued by state or local government, and repayable from the general fund of the issuer or a defined revenue source. Notes are issued for a variety of purposes: revenue anticipation notes and tax anticipation notes help the issuer overcome a cash flow shortage. See also Bond Anticipation Note; Tax Anticipation Note.
Investopedia Financial Dictionary:
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Municipal Note
Debt issued by state and local governments to finance capital expenditures such as construction projects. Municipal notes are appealing to investors because they mature in one year or less, offer fixed income and are often exempt from income tax at the local, state and/or federal levels.
Investopedia Says:
Investors can determine the risk of investing in a particular municipal note by examining the ratings issued by Moody's and by Standard & Poor's.
Moody's gives municipal notes three possible ratings: MIG 1 (best quality), MIG 2 (high quality) and MIG 3 (adequate quality).
Standard & Poor's uses a four-tiered rating system: SP-1+, SP-1, SP-2 and SP-3. Only the first three are considered worth investing in. SP-3 municipal notes are considered speculative.
Related Links:
Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy. Corporate Bonds: An Introduction To Credit Risk
Is the bond you're buying investment grade, or just junk? Find out how check the score. What Is A Corporate Credit Rating?
Find out how to determine whether the tax exemption offered by "munis" benefits you. Weighing The Tax Benefits Of Municipal Securities
Investing in these bonds may offer a tax-free income stream but they are not without risks. The Basics Of Municipal Bonds
We give you seven guidelines to help you keep more of your money in your pocket. Tax Tips For The Individual Investor
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Barron's Banking Dictionary
Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.
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