3.4.1 Long-Term, Fixed-Rate Debt

Most municipal debt is issued as long term, fixed-rate debt. Principal and interest are generally payable over 25 or 30 years. Publicly offered long term, fixed rate bonds are generally sold in denominations of $5,000 or integral multiples thereof and contain provisions allowing the issuer to redeem the bonds before maturity. They may be issued as serial bonds or as term bonds. Serial bonds involve the issuance of multiple bonds in a bond issue with the individual serial bonds maturing in consecutive years. Structuring the bonds in this way allows the issuer to extend the repayment period over time and to better match it with the expected life of the asset financed or the source of revenues. Serial bonds represent individual securities and are sold as such even though they may be parts of a single issue. Term bonds have a single maturity date. A bond issue may include both serial and term bonds. If so, the term bond typically matures after the final maturity of the serial bonds. See Section 2.2.2.1,Long-Term, Fixed-Rate Debt.