The first bond was issued in New York in 1982 then this trend took over lot of municipalities in America. A bond issue will have an impact on the size of municipality or national debt, but bond issues will also impact positively on the market and economy of a county. A bond has time values with interest known as coupons. What does the bond impact market on municipality?
The bond market is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market, usually in the form of bonds (Wikipedia, 2013).
Bond is the environment in which “issuance and trading of debt securities occurs.”
i) The bond market primarily includes government-issued securities and corporate debt securities, and facilitates the transfer of capital from savers to the issuers or organizations requiring capital for government projects, business expansions and ongoing operations (investopedia, 2013) .
Bonds issuance would be useful to facilitate access to financing of public projects, where it is necessary for long term instrument. Public goods are used to finance through taxation. Public goods can be described as public infrastructure project, include economic statistics, law enforcement, national defense, parks, and other things for the use to benefit to common people. Bonds are issued by the United States Treasury to fund the operation of the U.S. government, known as U.S Treasury Bonds, and Investors believe there is no chance that the U.S government will default on interest and principal payments on the bonds it issues. Comparison of issuance bonds market to finance “public goods” project at Fairfax County, City of Fairfax and Town of Herndon. On November 6th, 2012 Fairfax County has voted about issuance bonds to finance Renovate three libraries and build another library, and it also expands and improves county parks, three fire stations and update 22 courtrooms.
It will construct a levee and pumping station to shield the Huntington area from flooding, and it is intended to promote the health, safety and welfare of local people who live and work in Fairfax County. Libraries Funds such as $25 million will be used to renovate three libraries like John Marshall. Currently, a library is located close to Reston Town Center and planned Reston Parkway Metro station because that area may be redeveloped into a more urban, mixed-use center, the library may be relocated. Ten million dollars will be spent on project such as site studies, design and construction of the new library. The public safety bond will raise sum of $55millions, including $35 million to replace three fire stations like Baileys Crossroads, Jefferson and Herndon such as and $20 million to remodel twenty two courtrooms in Judicial Center. A lot of the funding like $63 million will spend on County Park Authority for improvements to current facilities and for purchase of land. The rest of money will support the “Northern Virginia Regional Park Authority”. County Park Authority look after 23,194 acres of parkland and other 420 parks, and these parks provide services, such as camping, golf, ice skating and swimming to county residents.
For community parks, the passage of the bonds mean a wide array of park and recreational facilities, including the first phase of improvements at Monticello Park, Hartland Road Park and White Gardens and continued phased development at Laurel Hill Park and Patriot Park. Countywide improvements in park signage and funding of the Mastenbrook matching grant program are also included (connectionnewspaper.com).
Different with Fairfax County, in 1999 the state allocated to the city US$ 3.1 million in Northern Virginia Transportation Development (NVTD) bonds to fund the widening of Lee Highway (now Fairfax Boulevard) to six lanes from chain bridge road (route 123) to the west city limits (WCL). The