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Municipal bond issuers are those organisations in charge of distributing bonds in exchange usually for a cash payment. Municipal bonds are issued normally by countries, states and cities within those municipality. You also see agents who act on behalf of those whom the bond directly belongs to. The law governing the issue of municipal bonds is highly extensive and full of numerous barriers to entry for those who are not compatible with them. It should be mentioned that these laws and the legislation that they represent vary country by country, state by state. The interest rate that municipal bonds receive is either a fixed or variable sum, depending again on the terms laid out by the issuer.

When a municipal bond is initiated, the issuer normally receives a cash payment in exchange for an agreement to provide the investor who provided the cash payment, a repayment over an agreed time period. The standard repayment periods for municipal bonds can be anything from six months to 10-30 years, perhaps even longer. The shorter periods are quite rare and you would be hard pressed to find investments for such a short period of time unless either the sum being borrowed is low or the repayment period can be guaranteed. Typically, 20+ years is the industry standard.

The purpose of municipal bond investing would be to use the investment from a bond sale to pay for the project that it is being invested for, typically this is a project or a long term capital investment or development. Depending on the stipulations of the bond offering, all of the capital raised from a bond sale may be used immediately or provisions put in place to spread it over a period of time.