muncipal bonds in india
MUNCIPAL BONDS IN INDIA
WHAT ARE MUNCIPAL BONDS
A municipal bond is a bond or debt security issued by a city or other local government or their agencies. Municipal bonds are securities that are issued for the purpose of financing the infrastructure needs of the issuing municipality which include schools, streets and highways, bridges, hospitals, public housing, sewer and water systems, power utilities, and various public projects.
HISTORY OF MUNI BONDS
Officially the first recorded municipal bond, a general obligation bond was issued by the City of New York for a canal in 1812. In India, The Bangalore Municipal Corporation was the first municipal body to raise funds by issuing bonds, backed by state government guarantee in 1997. The Bangalore Municipal Corporation issued eight-year bonds to raise Rs.125 crores in September, 1997. On the other hand, the Ahmadabad Municipal Corporation issued seven year municipal bonds in January 1998 to raise Rs.100 crores. This was a remarkable achievement as it was the first municipal bond issue in India without a state government guarantee and it represented the first step towards fully market-based system of local government finance. A 75 per cent private and 25 per cent public issue rated AA(SO) by Credit Rating Information Services of India Ltd. (CRISIL), indicating a high degree of certainty about timely repayment, gave momentum to a growing national consensus that municipal bonds provide a promising alternative for financing urban infrastructure. Ahmedabad was the first civic body in 2005 to issue redeemable tax free bonds.
MUNI BONDS IN INDIA
Since 1997, 25 municipal bond issues have been issued in India. These include taxable and tax-free bonds and pooled financing issues raising nearly Rs 14 billion. Of these 25, 17 have been for water supply and sewerage projects, six to fund roads. It ought to be noted that these municipal bond issues have been distributed among only a few ULBs,
WHAT ARE MUNCIPAL BONDS
A municipal bond is a bond or debt security issued by a city or other local government or their agencies. Municipal bonds are securities that are issued for the purpose of financing the infrastructure needs of the issuing municipality which include schools, streets and highways, bridges, hospitals, public housing, sewer and water systems, power utilities, and various public projects.
HISTORY OF MUNI BONDS
Officially the first recorded municipal bond, a general obligation bond was issued by the City of New York for a canal in 1812. In India, The Bangalore Municipal Corporation was the first municipal body to raise funds by issuing bonds, backed by state government guarantee in 1997. The Bangalore Municipal Corporation issued eight-year bonds to raise Rs.125 crores in September, 1997. On the other hand, the Ahmadabad Municipal Corporation issued seven year municipal bonds in January 1998 to raise Rs.100 crores. This was a remarkable achievement as it was the first municipal bond issue in India without a state government guarantee and it represented the first step towards fully market-based system of local government finance. A 75 per cent private and 25 per cent public issue rated AA(SO) by Credit Rating Information Services of India Ltd. (CRISIL), indicating a high degree of certainty about timely repayment, gave momentum to a growing national consensus that municipal bonds provide a promising alternative for financing urban infrastructure. Ahmedabad was the first civic body in 2005 to issue redeemable tax free bonds.
MUNI BONDS IN INDIA
Since 1997, 25 municipal bond issues have been issued in India. These include taxable and tax-free bonds and pooled financing issues raising nearly Rs 14 billion. Of these 25, 17 have been for water supply and sewerage projects, six to fund roads. It ought to be noted that these municipal bond issues have been distributed among only a few ULBs,