4.4.1.4. Listing of Bond Offerings
Most municipals are quoted and traded on a yield to maturity (YTM) basis. This type of quote is called a basis quote.
Some long-maturity revenue bonds are quoted and traded like corporate bonds as a percentage of par. These are known as dollar bonds. Dollar bonds are usually large-issue term securities, rather than serial issues, and they are traded fairly actively. Occasionally, bonds will be quoted on both a yield to maturity and a dollar basis.
|
Basis Quote and Dollar Quote |
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|
Face Value |
Issuer |
Coupon Rate |
Maturity |
Call Date* |
Yield to Maturity |
Dollar Quote |
|
$100 |
New Mexico |
4.25% |
7/1/30 |
C24 |
4.625% |
91.89% |
|
*Bond is callable in 2024 |
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A municipal bond quote, when you can find one, includes the following information:
• Number of bonds offered
• Name of the issuer
• Coupon rate
• Maturity date
• Yield basis
• Dealer’s concession
• Call provisions, if any
The name of the issuer will also note the type of project and whether it is a revenue bond.
When a bond is selling at a discount, its quoted yield will always be priced to maturity. However, when a bond is selling at a premium, it will be quoted at yield to call or yield to maturity, whichever is less. This is sometimes called yield to worst (YTW).