This is the second of an occasional series of posts on municipal bond issuance costs. You can see the first one, focusing on Fullerton, here.
In a recent study of 800 municipal bond issues for UC Berkeley, I found that issuance costs varied widely – from less than 0.2% of face value to over 10%. Issuance costs are to local governments like points are to a consumer taking out a home mortgage. In both cases, the goal should normally be to minimize them. While consumers have many forums to compare against and thus reduce financing costs, local government officials have been less fortunate – but that situation is starting to change.