underwriting outline

• no SEC registration: municipal bonds DO NOT 

bond disclosure:

GO bonds disclosure

• per capita debt

revenue bond disclosure 

• expected income from facility built with bond $
• how muni will spend $
• engineering info

 Exempt

• munis from Securities Act of 1933 registration requirements 
• official statement-not required by SEC

Municipal Securities Rulemaking Board Rules (MSRB)

• publish official statement
• official statement-marketing purposes

prospectus

• for corporate offerings

 official statement

• for municipal offerings

 Priority allocation of orders

1. presale orders
2. group net orders
3. designated orders
4. member orders-@takedown

• munis can be sold before underwriter's underwriting process

underwriting outline

legal opinion

• needed before a bond can be issued

bond counsel

• makes sure bond interest is exempt from taxes
• makes sure other legal matters won't affect value of bond
• makes sure bond is a municipal bond according to area laws
• may get favorable legislation passed 
• attests to tax exempt status of bond
• IRS determines tax exempt status of bond according to passed laws 

qualified legal opinion

• some aspect may make bond interest taxable
• some legal matter may affect bond value

nonqualified legal opinion

• no aspect would make bond taxable
• no aspect would prevent bond from keeping tax-exempt status

 official statement

• municipal bond equivalent to corporate bond prospectus
• underwriter prepares this before bond is sold to public
• given to purchasers and dealers when they request it 
• preliminary official statement, before official statement is given, no pricing info

official statement

1. purpose/use of bonds
2. how funds will be used?
3. call provisions
4. other info investors want

Which of the following statements is a description of a qualified legal opinion?

•  The legal opinion on the bond's tax exempt status is less than 100% certain
• qualified, some uncertainty on tax-exempt status
• OR some uncertainty on legal matter affecting bond
• nonqualified-no uncertainties about bond's tax exempt status