Municipal Bond Pricing App

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Directions and Setup

This application is designed to value municipal bonds from the issuer's perspective. It helps estimate a fair issue price for a bond with specified characteristics, including its coupon rate, maturity date, and call provisions. The application constructs municipal spot-rate curves from Treasury rates and other user-selected assumptions and can use an interest-rate model to value embedded call options when applicable.

If you are already familiar with municipal bond pricing, simply follow the Guided Workflow.

If you are not familiar with municipal bond pricing, or would like additional background on the concepts and calculations used by this application, the following pages provide further information:

Two Pricing Examples

HOW TO FIND AND READ THE RESULTS — Bond valuation prices will be shown at the top of the Guided Workflow and other pages as you modify the bond parameters, interest rates, and other items. Below are two examples (not live calculations).

Example 1 — Non-Callable Bond

Price — 117.55: The estimated clean price per $100 of par value. Because there is no call provision, only one price is needed.
Settlement Date — 08/27/2026: The date on which the bond is priced and ownership and payment are assumed to occur.
YTM — 3.75%: Yield to maturity: the single yield consistent with the price when all payments continue through maturity.
Coupon Rate — 5.00%: The annual interest rate paid on the bond's par value.
Call Value / Price and OAS — —: These are not applicable because this bond has no embedded call option.
Call Date — NC; Years to Call — —: NC means non-callable. There is therefore no call date or time remaining to a call.
Maturity Date — 08/27/2046: The scheduled date for repayment of principal.
Original and Remaining Maturity — 20.0 years: At issuance, the original term and remaining term are both 20 years.

Example 2 — 20-Year Bond Callable After 10 Years

Call-Case Price — 114.75: The modeled price after recognizing the issuer's right to redeem the bond early.
No-Call Price — 125.01: The value of the same bond if its call provision did not exist.
Call Option Value — 10.26: The difference between the no-call and call-case prices: 125.01 − 114.75.
Settlement Date — 08/27/2026: The valuation date used to determine remaining cash flows and time periods.
YTC and YTM: Yield to call assumes redemption on the call date; yield to maturity assumes payments continue to maturity. The actual banner displays calculated values.
Coupon Rate — 5.00%: The annual contractual interest rate applied to par value.
Call Value / Price — 8.94%: The call option value divided by the call-case price: 10.26 ÷ 114.75.
OAS: The option-adjusted spread produced by the selected interest-rate model and assumptions.
Call Date — 08/27/2036; Years to Call — 10.0: The issuer may first redeem the bond ten years after issuance.
Maturity Date and Maturity Measures: The bond matures on 08/27/2046. At issuance, both original and remaining maturity equal 20 years.