Wall Street Words word of the day = Baby Bond

Hello YouTube, Todd Ault here, and Welcome to Wall Street Words! Today's Wall Street term is "Baby Bond"

"Baby Bonds" are generally bonds issued below a thousand dollars. They're kind of a retail product for the retail investor to get a bond that maybe is a lesser price. They're smaller denominations for retail investors to hold them in their account. Now, think of a bond issued by a county, or state government, municipality, a water district, that needs money, and they can issue things on a tax-exempt basis. They want to attract local investors, so they make the investment a little smaller instead of these larger bonds. So you wanted a five hundred dollar bond or a hundred dollar bond. These are "Baby Bonds" and they're designed to get the retail investor to be able to buy something in a smaller denomination. These "Baby Bonds" can be very valuable to investors and they're generally issued on a tax-free basis. Today's word is "Baby Bond."

A baby bond is a fixed income security that is issued in small-dollar
denominations, with a par value of less than $1,000. The small
denominations enhance the attraction of baby bonds to average retail
investors. Baby bonds are issued mainly by municipalities, counties,
and states to fund expensive infrastructure projects and capital
expenditures. These tax-exempt municipal bonds are generally
structured as zero-coupon bonds with a maturity of between eight and
15 years. The muni bonds are usually rated A or better in the bond
market.

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