Municipal Debt Offerings: Specialty and Other Types of Bonds

Summary

This practice note provides an overview of different types of municipal bonds in the United States other than general obligation and revenue bonds. State and local governments in the United States employ a wide variety of legal instruments and techniques to borrow funds. This note describes some of the most widely used types of municipal securities. Specifically, it considers such traditional approaches as non-ad valorem revenue bonds, special assessment bonds, special obligation bonds, tax increment bonds, private activity bonds, and short-term notes, among others. It also reviews some recent innovations in state and local government financing, including letters of credit, tender option bonds, variable rate securities, zero coupon bonds, and taxable bonds. Finally, this note looks at catastrophe, disaster, and resilience bonds as well as credit default swaps.