April 2008
Intermediate to advanced
1376 pages
38h 48m
English
Content preview from The Handbook of Municipal Bonds
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.
CHAPTER 33
Municipal Bond Swaps
Evan C. Rourke, CFA Portfolio Manager M. D. Sass Tax Advantaged Bond Strategies, LLC
For individual investors, executing bond swaps can be a valuable tool for managing their portfolio. Swaps can be done to reduce an investor’s tax liability or to alter the characteristics of the investor’s portfolio. Swaps can be used to increase income, to reduce credit risk, to increase liquidity, or to diversify a portfolio. Swaps can be done to restructure a portfolio to meet a revised strategic plan or to adjust to changing circumstances. In this chapter, we describe bond swaps.
DESCRIPTION OF A BOND SWAP
Simply put, a bond swap involves the selling of one bond and the simultaneous purchase of another. The addition of the new bond and subtraction of the old bond should adjust the portfolio to better conform to investment objectives. Swaps are done to adjust coupon, maturity, credit rating, yield, or portfolio diversity.
Investors should remember that transactions have costs and frequent trading can reduce portfolio performance. Investors should include cost considerations before deciding to execute bond swaps. Some broker-dealers charge lower commissions for swaps than for outright purchase and sales. Transaction fees may be lower for municipal bonds held in fee-based accounts.
TAX SWAPPING
The most common form of bond swap involving municipal bond is the tax swap. The objective of tax swapping is to minimize an investor’s overall tax liability. Investors ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access
More than 5,000 organizations count on O’Reilly
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.