Municipal Market By The Numbers
Municipal bonds are essential for funding the construction of schools, roads, utilities, public buildings, hospitals, and other public infrastructure. However, it remains complex, paper-driven and dominated by large financial institutions. It is difficult to obtain in-depth financial information on municipal Issuers and compare them over an extended period. Paper-laden, manually intensive processes are prevalent, and Issuers lack the right tools to find and compare the best fund raising opportunities.
State of the Market
Municipal Bonds Market has not changed for a long time. The problem is a lack of transparency and the complexity of financial instruments. Underwriters and institutional investors nexus prevent individual investors from having access to lucrative bonds, which leads to lower liquidity. Overall, the Municipal Market is illiquid, and transaction costs are high, price adjustment is slow, different buyers pay different prices for the same bond and bonds are overly complicated.
Uneven Playing Field
Prominent participants unfairly benefit from this opacity at the expense of municipalities and small investors. The municipal bond market continues to be inefficient with borrowers and investors paying billions each year in unnecessary fees, transaction costs, and interest expenses. The cost of borrowing varies widely, between 1.71% and 10.62% of the face value.
We believe that Citizens should be able to finance the projects of interest to them. We’ve designed a modernized solution that simplifies the issuance process and makes it easier to connect municipal issuers to investors. We see a unique opportunity to disrupt this market by empowering issuers and investors through technological advances such as AI and Block-Chain to facilitate direct issuances and democratize the process.