What are the procedures for issuing municipal bonds?

Municipal bonds are a type of debt instrument used by cities and other municipalities in South Carolina to finance large projects. The process for issuing municipal bonds begins with a municipality identifying the need for a specific project and determining how it will be funded. This usually requires an analysis of the costs and benefits of the project before deciding if issuing municipal bonds is the right choice. The city must then adopt a resolution or ordinance authorizing the issuance of the bonds and the amount to be borrowed. The next step is to engage a bank or other financial institution to act as an underwriter. The underwriter will provide guidance on the type of bonds to be issued and the terms and conditions under which they will be offered. The municipality must then file an official statement with the South Carolina State Treasurer’s office to provide prospective investors with information about the bonds and the project that will be funded. The official statement should be approved by the municipal governing body before being issued to potential investors. After the official statement is in place, the municipality must put out a Notice of Sale to inform potential investors of the bonds and the terms for purchasing them. Potential investors may submit bids for the bonds to the municipality. The municipality then accepts bids and awards the sale to the underwriter who submitted the most advantageous bid. After the sale is complete, the municipality is responsible for the repayment of the bond principal and interest. The repayment is usually made in periodic installments over the life of the bond. Once the bonds are retired, the project funded by the issuance of the bond is expected to be able to generate a return for the municipality.

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What are the procedures for issuing municipal bonds?

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