Ad Valorem Tax
A tax based on the value or assessed value of the property.

Advance Refunding
Replacement of debt by issuing new bonds to repay an outstanding bond issue prior to its first call date. Proceeds of the new issue are invested in government securities which are placed in an escrow account. Earnings on the escrow account are used to pay debt service on the old bonds until they are retired, usually on the first call date.

Bid
The price at which a buyer will purchase a security.

Callable Bond
A bond that can be redeemed by the issuer prior to its maturity. Sometimes a premium is paid to the bond owner when the bond is called.

Certificate of Participation (COP)
Financing whereby an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Usually issued by authorities through which capital is raised and lease payments are made. The authority usually uses the proceeds to construct a facility that is leased to the municipality, releasing the municipality from restrictions on the amount of debt that they can incur.

Crossover Refunded
The revenue stream originally pledged to secure the securities being refunded continues to be used to pay debt service on the refunded securities until they mature or are called. At that time, the pledged revenues pay debt service on the refunding securities.

Discount Bond
A bond that is priced at less than its face amount.

Double Barreled
Bonds secured by the pledge of two or more sources of repayment.

Face Value
The stated principal amount of a bond.

General Obligations
Voter approved bonds that are backed by the full faith, credit and unlimited taxing power of the issuer.

Marketability
A measure of the ease with which a security can be sold in the secondary market. Holders of municipal securities can sell their bonds through one of the more than 2,000 securities dealers and banks registered to buy and sell municipal securities.

Mello Roo's (Unique to California)
Bonds used for developments that benefit a particular district (schools, prisons, etc.) and are secured by special taxes based on the assessed value of the properties within the district. This tax assessment is included on the county tax bill.

Offer
The price at which a seller will sell a security.

Par Value
The face value of a bond, which is generally $1,000. Most municipal bonds are issued in denominations of $5,000 or multiples of $5,000.

Premium Bond
A bond that is priced at more than its face amount.

Principal
Face amount of a bond, exclusive of accrued interest.

Redevelopment Agency (Tax Allocation)
Bonds secured by all of the property taxes on the increase in assessed valuation above the base, on properties in the project.

Revenue Bonds
Bonds secured by the revenues derived from a particular service provided by the issuer.

Sinking Fund
A bond with special funds set aside to retire the term bonds of a revenue issue each year according to a set schedule. Takes effect after serial maturities have been paid. Bonds are retired through either calls, open market purchases, or tenders.

Taxable Equivalent Yield
The taxable equivalent yield is equal to the tax free yield divided by the sum of 100 minus the current tax bracket. For example the taxable equivalent yield of a 6.50% tax free bond for someone in the 32% tax bracket would be:
6.5/(100-32) = 0.0955882 or 9.56%.

Yield
A measure of the income generated by a bond. The amount of interest paid on a bond divided by the price.

Yield to Maturity
A yield concept designed to give the investor the average annual yield on a security. It is based on the assumption that the security is held to maturity and that all interest received over the life if the security can be reinvested at the yield to maturity.

Zero Coupon Bond
A bond for which no periodic interest payments are made. The investor receives one payment- at maturity. The maturity value an investor receives is equal to the principal invested plus interest earned, compounded semiannually at the original interest rate to maturity.

DISCLAIMER- Descriptive information (including ratings and call information) displayed on the Bond Inventory has been obtained from sources that we believe reliable, but no representation is made as to its completeness or accuracy. Price, yield and availability are subject to change.