The Blue List in Finance: What It Is, How It Works, Types, and Examples
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Summary:
The blue list, a compilation of daily municipal bond offerings, is a crucial tool in the finance industry. This article provides an in-depth exploration of the blue list, covering its historical context, types of bonds, and the transition to electronic formats. Understand the significance of being on the blue list, delve into the details of the electronic version, and grasp related concepts such as the blue list total and blue bonds—all presented in a straightforward and informative tone for finance professionals.
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What is the blue list?
The blue list stands as a daily record, primarily featuring tax-exempt municipal bonds available for purchase. It serves as a tool for banks and dealers to represent these offerings in the finance industry.
Two main kinds of municipal bonds on the blue list
General obligation bonds (GO)
General obligation bonds are issued by governmental entities without being backed by a specific project’s revenue. Examples include GO bonds supporting toll road construction, some relying on property taxes.
Revenue bonds
Revenue bonds secure payments through various taxes like sales, fuel, or hotel occupancy. Conduit issuers involve third parties covering interest and principal payments.
Understanding the blue list
Historically, the printed blue list focused on tax-exempt municipal debt securities, providing details on notional amounts, interest rates, and maturity dates. The classification criteria encompassed default risk, issuer type, and income payment cycles.
The transition to electronic blue lists has enhanced information accessibility for investors. Key details available now include:
Bond information on the electronic blue list
- Issuing authority’s name (corporate, state, municipality, or county agency)
- CUSIP number (unique identifier for U.S. and Canadian stocks and bonds)
- Coupon rate (annual interest rate as a percentage)
- Face value (amount paid at maturity)
- Maturity date (date of bond maturity)
- Yield to maturity (estimated returns if held to maturity)
- Purpose of debt issuance (e.g., new bridge construction)
- Offering bank or dealer’s name
What does it mean to be on the blue list?
Inclusion on the blue list signifies being part of daily municipal bond offerings and secondary market interest. The main bond types featured are general obligation and revenue bonds, making it a crucial aspect for finance professionals to track.
Frequently asked questions
How does the blue list impact the finance industry?
The blue list is a crucial tool in the finance industry, providing a daily compilation of municipal bond offerings and aiding decision-making for professionals.
Are there other types of bonds included in the blue list?
While the blue list primarily features tax-exempt municipal bonds, it may also include other types depending on the platform and market conditions.
How is the blue list total calculated?
The blue list total represents the par value of municipal securities listed on the blue list on a specific date, providing insights into overall market exposure.
What role do blue bonds play in the finance industry?
Blue bonds, while not directly tied to the blue list, contribute to the finance industry’s adoption of environmentally conscious financial instruments by allocating resources for marine ecosystem conservation.
Key takeaways
- The blue list serves as a daily record of tax-exempt municipal bonds offered by banks and dealers.
- Main types on the blue list are general obligation (GO) bonds and revenue bonds, each with distinct characteristics.
- The transition to electronic blue lists provides comprehensive bond details, enhancing transparency for investors.
- Inclusion on the blue list is significant, signifying participation in daily municipal bond offerings and secondary market interest.
- The blue list total indicates the par value of municipal securities, offering insights into overall market exposure.
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