Glossary of Municipal Securities Terms


A letter of credit, standby bond purchase agreement or other arrangement used to provide liquidity to purchase securities, typically variable rate demand obligations, that have been tendered to the issuer or its agent but which cannot be immediately remarketed to new investors. The provider of the liquidity facility, typically a bank, purchases the securities (or provides funds to the issuer or the remarketing agent to purchase the securities) until such time as they can be remarketed. See:LETTER OF CREDIT; LIQUIDITY; STANDBY BOND PURCHASE AGREEMENT. Compare: CREDIT FACILITY.

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