Glossary of Municipal Securities Terms


A letter signed by an investor acknowledging the risks associated with the securities being purchased and usually containing certain representations of the investor as to the investor’s net worth, sophistication and access to information. An issuer and underwriter may sometimes require an investor letter in connection with more risky securities that they believe should be held only by investors with sufficient resources and market sophistication to understand and bear the risks involved in such investment. This letter is sometimes referred to as a “big boy letter” or “sophisticated investor letter.” When used in a private placement, this letter may be referred to as a “private placement letter.” Some letters may be said to “travel” if they include a representation on the part of the investor to the effect that, if the investor resells the securities, it will require the purchaser to sign an investor letter. Such a letter is often referred to as a “traveling letter.”

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