Series 54: Municipal Securities Definition

Municipal Securities Definition

A municipal security is a debt obligation of the state or any political subdivision of the state. The following facts are true of municipal securities:

•The debt instrument may be a long-term bond or short-term note.

•The security may be either a direct obligation issued by the state to pay principal and interest, or it may be issued by a private entity and guaranteed by the state as to principal or interest.

•A political subdivision includes cities and counties.

•An agency is an administrative entity that is owned and controlled by the government. Examples