Glossary of Municipal Securities Terms

BOND YEAR

A unit of $1,000 of debt outstanding for one year. The number of bond years in an issue is equal to the product of the number of bonds (with one bond equal to $1,000 regardless of actual authorized denominations) and the number of years from the dated date (or other stated date) to the stated maturity. The total number of bond years is used in calculating the average life of an issue and its net interest cost. Computations are often made of bond years for each maturity or for each coupon rate, as well as total bond years for an entire issue. See: AVERAGE LIFE; NET INTEREST COST.

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