http://en.wikipedia.org/wiki/Municipal_bond http://en.wikipedia.org/wiki/Municipal_bond_arbitrage http://www.bogleheads.org/wiki/Municipal_bonds
“The term municipal bond is commonly used in the United States, which has the largest market of such trade-able securities in the world estimated at $3.7 Trillion in 2011.”
“Potential issuers of municipal bonds include states, cities, counties, redevelopment agencies, special-purpose districts, school districts, public utility districts, publicly owned airports and seaports, and any other governmental entity (or group of governments) at or below the state level. Municipal bonds may be general obligations of the issuer or secured by specified revenues.”
“The U.S. municipal bond market is unique in the world for its size, liquidity, legal and tax structure and bankruptcy protection afforded by the U.S. Constitution.”
“In the United States, interest income received by holders of municipal bonds is often exempt from the federal income tax, and may be exempt from state income tax, although municipal bonds issued for certain purposes may not be tax exempt.”
Ratings Agencies: