Business / Taxes / Municipal Bond (Muni): Municipal bonds are debt securities issued by state or local governments or their agencies to finance general governmental activities or special projects. For example, a state may float a bond to fund the construction of highways or college dormitories. The interest a muni pays is usually exempt from federal income taxes, and is also exempt from state and local income taxes if you live in the state where it was issued. However, any capital gains you realize from selling a muni are taxable, and some muni interest may be vulnerable to the alternative minimum tax (AMT). Munis generally pay interest at a lower rate than similarly rated corporate bonds of the same term. However, they appeal to investors in the highest tax brackets, who may benefit most from the tax-exempt income.
Bond Noun Synonyms: tie(s), shackles, chains, fetters, manacles, handcuffs, trammels, thongs, cord(s), rope(s), restraint(s), constraint(s), check(s), control(s), rein(s)
Bond Verb Synonyms: cement, bind, hold together, stick, cohere
Municipal Noun Synonyms: civic, civil, metropolitan, urban, city, town, village, borough, parish, council
Business / Finance / PAC Bond: Stands for Planned Amortization Class bond. A tranche class offered by some CMOs that has a sinking fund schedule and an ability to make principal payments that are not subordinated to other classes. MORE