Series 50: Anticipation Notes

Anticipation Notes

Municipal notes are called anticipation notes because they are issued in anticipation of an expected source of income that will make the periodic payments on a bond. Anticipation notes allow a project to get underway before its funding has been received.

Notes are issued by different names, depending on where the anticipated receipts are coming from, whether from taxes, grants, or fees. Like any cash advance, municipal notes are meant to smooth out cash flows until income is received. They are tax-exempt to the note holders.

Tax anticipation notes (TANs). These notes are issued to finance a project’s current operations in anticipation of future