Series 65: Tax-Free Municipal Anticipation Notes

Tax-Free Municipal Anticipation Notes

Municipal notes are short-term debt obligations, whose term usually does not exceed a year. Municipal notes are issued at a discount to par. The investor receives a fixed amount on a certain date and does not receive interest payments. The primary purpose of municipal notes is to meet a municipality’s cash flow needs in anticipation of the taxes, fees, or other sources of revenue that fund its ongoing commitments.

Municipal notes are called anticipation notes, because they are issued in anticipation of an expected source of income. Anticipation notes allow a project to get underway before funding has been received. Notes are issued by different names, de