glossary | Estimated Price

Estimated Price

Determining the right price for a municipal bond can be challenging for investors. Since only about 1% of all municipal bonds trade on any given day, it's unlikely a bond needing a price will have a recent trade to reference. MuniBonds.AI uses industry best practices to evaluate a bond's fair market value according to Financial Accounting Standards Board guidelines (Topic 820, formerly known as FASB 157). Our valuation method classifies bonds into three types based on these standards:

Type 1 Estimated fair value bond price is based on reviewing observable market prices during recent timeframes.
Type 2 For those bonds that do not have recent observable market transactions, prices are derived based upon the value of the income stream of the bond at maturity relative to bonds of a similar class.
Type 3 For those bonds that do not have observable inputs, prices are developed from the assessment of market participant assumptions based on the best information available under the circumstances.
MuniBonds.AI’s methodology has been thoroughly tested using a large database of municipal bond prices. We estimate bond prices using real-time market data fed into our proprietary pricing algorithm. This method, called market ratings, groups bonds by factors such as state, sector, maturity, coupon, and tax status. The trading and yield range of the group is used to estimate the price of a bond in real time. This approach differs from the common industry practice of pricing bonds based mainly on credit ratings from rating agencies. These traditional methods can be inaccurate because they don't account for a bond's unique features, like the specific state or sector of issuance. Each bond issuer has distinct credit risks and financial issues, leading to price differences in the market. MuniBonds.AI's method reduces these inaccuracies. MuniBonds.AI's estimated prices are based on extensive trading data from nearly 1.8 million bonds issued by 50,000 state and local entities. We provide information on all individual municipal bonds, including their complete trading history, estimated current and historical prices, proprietary market ratings, yield curves, and dealer trading ranges.

Disclaimer

We rely on financial data provided by 3rd parties. The data is believed to be accurate, however, MuniBonds.AI makes no representation or warranty that any data or information (including but not limited to estimated pricing) supplied to or by it are complete or free from errors, omissions, or defects. You agree not to copy, modify, reformat, download, store, reproduce, reprocess, transmit or redistribute any data or information found herein or use any such data or information in a commercial enterprise without obtaining a Professional Use license. All data and information is provided "as is" for personal informational purposes only, and is not intended for trading purposes or advice. Please consult your broker or financial representative to verify pricing before executing any trade. MuniBonds.AI does not provide legal, tax, accounting, or any other professional advice. This Site is intended only as an informational tool for your convenience, and should not in any way be construed as investment advice by MuniBonds.AI. If you make investment decisions based on information you receive in connection with the Site, you do so at your own risk and MuniBonds.AI and its employees will not be liable for any losses that you may sustain. Site users should conduct their own independent research and due diligence and obtain professional advice, if necessary, before making any investment decisions or recommendations. MuniBonds.AI gives no express or implied warranties, including, but not limited to, any warranties of merchantability or fitness for a particular purpose or use. In no event shall MuniBonds.AI be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the information provided by MuniBonds.AI.

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Market Rating

Bonds rated from five stars (best) to none. Bonds with lower spreads (less risk) are given more stars than bonds with higher spreads (more risk). Ratings are calculated frequently to ensure they reflect the most current market factors.

Liquidity Rating

Bonds rated from five to none. Computed daily as a ratio based on the number of trades in a given bond compared to the average number of trades of all the bonds in a similar class. The higher the ratio, the more frequently the bond is traded relative to similar bonds.

Fitch Ratings

The Primary Credit Rating Scales (those featuring the symbols 'AAA'–'D' ) are used for debt and financial strength ratings.

Moody’s Ratings

Municipal ratings incorporate Moodyʼs assessment of the default probability and loss severity of these issuers and issues.

Standard & Poor’s Ratings

Curious as to what a ʻAAAʼ or ʻBBʼ rating on a bond actually means? View detailed descriptions of what constitutes each of S&P's ratings here.