City Securities Tax Exempt Bonds Tax-exempt municipal bonds are debt obligations issued by states, cities, counties, and other governmental entities to raise money to build schools, highways, hospitals, and sewer systems, as well as many other projects for the public good.
Current yield is the annual return on the dollar amount paid for a bond.
Yield to maturity is the total return you receive by holding a bond until it matures. Tax-exempt yields are usually stated in terms of yield to maturity, with yield expressed at an annual rate. If you pay more than par, the yield to maturity will be lower than the coupon rate. If purchased below par, the bond will have a yield to maturity higher than the coupon rate. When the security sells below par value, it is said to be selling at a discount.