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In finance, a bond is a type of security under which the issuer (debtor) owes the holder (creditor) a debt, and is obliged – depending on the terms – to provide cash flow to the creditor. The timing and the amount of cash flow provided varies, depending on the economic value that is emphasized upon, thus giving rise to different types of bonds. The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus, a bond is a form of loan or IOU. Bonds provide the borrower with external funds to finance long-term investments or, in the case of government bonds, to finance current expenditure.
A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest, called coupon payments, and to repay the face value on the maturity date.
A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation. Typically, only investors in the highest tax brackets benefit from buying tax-exempt municipal bonds instead of taxable bonds. Taxable equivalent yield calculations are required to make fair comparisons between the two categories.
Local government in England broadly consists of three layers: civil parishes, local authorities, and regional authorities. Every part of England is governed by at least one local authority, but parish councils and regional authorities do not exist everywhere. In addition, there are 31 police and crime commissioners, four police, fire and crime commissioners, and ten national park authorities with local government responsibilities. Local government is not standardised across the country, with the last comprehensive reform taking place in 1974.
In finance, a surety, surety bond or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. Usually, a surety bond or surety is a promise by a surety or guarantor to pay one party a certain amount if a second party fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal's failure to meet the obligation. The person or company providing the promise is also known as a "surety" or as a "guarantor".
A credit rating is an evaluation of the credit risk of a prospective debtor, predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting. The credit rating represents an evaluation from a credit rating agency of the qualitative and quantitative information for the prospective debtor, including information provided by the prospective debtor and other non-public information obtained by the credit rating agency's analysts.
The bond market is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, but it may include notes, bills, and so on for public and private expenditures. The bond market has largely been dominated by the United States, which accounts for about 39% of the market. As of 2021, the size of the bond market is estimated to be at $119 trillion worldwide and $46 trillion for the US market, according to the Securities Industry and Financial Markets Association (SIFMA).
A revenue bond is a special type of municipal bond distinguished by its guarantee of repayment solely from revenues generated by a specified revenue-generating entity associated with the purpose of the bonds, rather than from a tax. Unlike general obligation bonds, only the revenues specified in the legal contract between the bond holder and bond issuer are required to be used for repayment of the principal and interest of the bonds; other revenues and the general credit of the issuing agency are not so encumbered. Because the pledge of security is not as great as that of general obligation bonds, revenue bonds may carry a slightly higher interest rate than G.O. bonds; however, they are usually considered the second-most secure type of municipal bonds.
The state treasurer of California is a constitutional officer in the executive branch of the government of the U.S. state of California. Thirty-five individuals have held the office of state treasurer since statehood. The incumbent is Fiona Ma, a Democrat. The state treasurer's main office is located in the Jesse M. Unruh State Office Building in Sacramento.
The Local Government Association (LGA) is the national membership body for local authorities in England and Wales. Its core membership is made up of 317 English councils and the 22 Welsh councils through the Welsh Local Government Association.
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A Green bond is a fixed-income financial instruments (bond) which is used to fund projects that have positive environmental and/or climate benefits. They follow the Green Bond Principles stated by the International Capital Market Association (ICMA), and the proceeds from the issuance of which are to be used for the pre-specified types of projects.
The Australian government debt is the amount owed by the Australian federal government. The Australian Office of Financial Management, which is part of the Treasury Portfolio, is the agency which manages the government debt and does all the borrowing on behalf of the Australian government. Australian government borrowings are subject to limits and regulation by the Loan Council, unless the borrowing is for defence purposes or is a 'temporary' borrowing. Government debt and borrowings have national macroeconomic implications, and are also used as one of the tools available to the national government in the macroeconomic management of the national economy, enabling the government to create or dampen liquidity in financial markets, with flow on effects on the wider economy.
A local government funding agency (LGFA) or bond bank, or other terms, is financial institution that serves as a vehicle for local government authorities such as municipalities, county councils and regions to access capital markets for the purpose of jointly procuring credit for public investment projects. The local and/or regional authorities of a country or state typically own the LGFA, sometimes with a minor ownership by the state.
The Pooled Finance Development Fund Scheme (PFDF) has been set up by the Central Government of India. The main aim of the Government authorities is to provide credit enhancement facilities to Urban Local Bodies (ULBs) based on their credit worthiness. This will enable them to access market borrowings through state-level pooled mechanism. PFDF is to ensure availability of resources to Urban Local Bodies in order to improve urban infrastructure and ultimately attain the goal of self-sustainability.
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The Local Capital Finance Company is a United Kingdom-based quango and private company that provides loans to local authorities. It is an alternative for local authorities to borrowing via the Public Works Loan Board of the UK Debt Management Office, which in turn is part of UK Governments HM Treasury.
John Clancy is a former political leader (2015–2017) of the largest local authority in Europe, Birmingham City Council, and is a visiting professor at Birmingham City University Business School, in the U.K.'s second largest city, Birmingham. He is a qualified solicitor.
References
- 1 2 3 Marrs, Colin (27 March 2014). "Aidan Brady on the municipal bond agency". Room 151. Retrieved 20 May 2016.
- ↑ Jenkins, Patrick; Pickard, Jim (1 February 2015). "Cash-strapped councils to raise billions with new municipal bonds". Financial Times. Retrieved 18 May 2016.
- ↑ Jonstone, Richard (19 February 2016). "First council lines up to borrow from municipal bond agency". Public Finance. Retrieved 20 May 2016.
- 1 2 3 4 Moore, Elaine (1 February 2015). "Million-pound municipal bond market stuck at zero". Financial Times. Retrieved 19 May 2016.
- 1 2 3 4 5 Johnstone, Richard (25 January 2016). "Municipal bonds agency opens for business". Public Finance. Retrieved 19 May 2016.
- ↑ Marrs, Colin (10 October 2019).PWLB rate hike best day for a long time for bonds agency. Article in 'Room 151'. Retrieved 22 October 2019.
- ↑ Evans, Richard (5 February 2014). "Mini-bond loss 'certain' says broker". The Telegraph. Retrieved 19 May 2016.
- 1 2 3 4 Cross, Luke (27 April 2016). "Canaccord housing team joins JC Rathbone". Social Housing. Retrieved 19 May 2016.
- ↑ Cobley, Mark (7 September 2014). "U.K. Plans to Form Municipal Bonds Agency". Wall Street Journal. Retrieved 19 May 2016.
- ↑ Marrs, Colin (17 October 2019). Brady to step down from bond agency helm. Article in Room 151 Retrieved 22 October 2019.
- ↑ Endole Latest Activity. Retrieved 22 October 2019.
- ↑ "Municipal Bonds Agency yet to refresh arid public sector market". Global Capital. 23 March 2016. Retrieved 20 May 2016.