Glossary of Municipal Securities Terms


The issuance of municipal securities by a governmental unit (referred to as the “issuer” or “conduit issuer”) to finance a project to be used primarily by a third party, which may be a for-profit entity engaged in private enterprise, a 501(c)(3) organization, or another governmental entity (referred to as the “conduit borrower”). In a conduit financing, the conduit borrower is liable for making debt service payments on the bonds. Industrial development bonds, multi-family housing revenue bonds and qualified 501(c)(3) bonds are common types of conduit financings. See: 501(c)(3); HOUSING REVENUE BOND – Multi-family housing revenue bonds; INDUSTRIAL DEVELOPMENT BOND; PRIVATE ACTIVITY BOND.

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