MMD municipal bonds are categorized by a company called Municipal Market Data that is owned by the financial news reporting agency Thompson Reuters. Investors can use MMD to investigate and organize municipal bonds. MMD municipal bonds are high quality, and MMD allows investors to make more informed decisions by using tools available through the MMD software interface. For example, MMD subscribers can look for bonds with criteria that include expiration, yield and tax-exempt issuance.
MMD municipal bonds are mostly investment grade or higher. High grade bonds are given a rating of AA and AAA by the Standard & Poor's rating agency, and investment grade bonds are bonds rated BBB or higher. The more A's there are in a bond's grade, the lower the presumed risk of holding it is. MMD municipal bonds can also be charted with bonds from previous years to see how yields on similar grade bonds have changed over time.
The yield of MMD municipal bonds is not the same as the grade. High grade bonds do not necessarily have a high yield. MMD facilitates searches for specific yield municipal bonds with its custom software features. For example, municipal bond searches via MMD show bank qualified and non-qualified bonds. Bank qualified bonds have lower yield due to higher demand spurred by tax deductibility of expenses associated with holding the bonds, according to financial advisory firm WM Financial Services.
Both primary and secondary bond markets are included in the MMD database. Primary markets are first issue bonds that have not been resold, and secondary market municipal bonds are bonds that have been resold after being bought through an initial bond auction or sale. The MMD interface tools provide information on specific bonds such as intraday trading price changes and volume of municipal bonds traded, in addition to the source and bond purpose -- for example, municipal bonds for sale by dealers issued to finance a convention center.
The location of MMD municipal bonds includes issuing municipalities across the United States and Puerto Rico. This allows investors to assess which municipal bonds are the most fitting in terms of duration until expiration, yield and risk. Within these localities a range of bond sectors are also cataloged and analyzed by MMD. The MMD municipal bond search also specifies volume of bonds traded and the range of bond types such as non-callable bonds, a type of bond unable to be bought back by the issuer before expiration.
- TM3: Municipal Market Data
- Smith Affiliated Capital: High Yield vs High Grade Municipals
- Western Financial Group; Letter to Alaska Municipal Bond Bank; Chip Pierce, Feb. 10, 2009
- Standard & Poor's: Issue Credit Rating Definitions
- WM Financial Services: Bank Qualified Bonds
- The Bond Market Association: An Investor's Guide to High Yield Bonds
- Thompson Municipal Market Monitor: Municipal Market Data (MMD)
- Standard & Poor's Financial Services, LLP: How to Buy Municipal Bonds
- Bonds Online: Municipal Bonds
- Municipal Securities Rule Making Board: Electronic Municipal Market Access