A municipal bond is issued by a city's municipal corporation or another urban local body to raise money for projects such as water supply, sewerage or roads.
Since Pune Municipal Corporation's issue in 2017, cities including Ahmedabad, Hyderabad, Indore, Lucknow, Surat, Visakhapatnam and Vadodara have raised money through listed municipal bonds under SEBI's rules for municipal debt securities. Many are rated AA or AA+ and some have repayments set aside in a separate account (an escrow).
Municipal bonds do not carry a central government guarantee unless the terms say so. The city's own revenues and the escrow arrangement are what investors rely on.
Related
Related terms: Green bond · Credit rating · Listed and unlisted bonds
Before investing, look up the issuer: all its outstanding bonds, rating history and disclosure documents.
This page is for information only. It is not investment advice, a credit rating or a recommendation to buy, sell or hold any security. Facts are taken from the issuer's own documents and the sources linked on this page; check them with the source before investing.
