Series 79 practice questionmediumMunicipal Securities
What is a conduit municipal financing?
- AA structure in which a governmental issuer issues bonds for the benefit of a private or nonprofit borrower that ultimately repays the debt✓ Correct answer
- BA tender offer for tax-exempt notes
- CA stabilization purchase by the underwriting syndicate
- DA securities exchange registered on Form S-4
Explanation
Why A — A structure in which a governmental issuer issues bonds for the benefit of a private or nonprofit borrower that ultimately repays the debt
A structure in which a governmental issuer issues bonds for the benefit of a private or nonprofit borrower that ultimately repays the debt In conduit financings, the governmental entity serves as issuer, but the conduit borrower bears repayment responsibility. Hospitals, universities, and certain private activity projects often use this structure.
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