Anticipation Note

Anticipation (of your) note. The way we feel when you try to sing in the shower. You suck. We can’t anticipate which note you’ll hit because you’re THAT bad. (Dum dum dum….)

Let’s say that a town (otherwise known as a municipality) needs money pronto. That municipality can issue short-term anticipation notes that investors buy. The anticipation factor comes into play because the municipality anticipates that it will pay investors back (when the note matures) in a way that has already been planned for.

If interest rates are good, and a note has a good credit rating, investors will line up to purchase these bad boys. But if a note is too risky (i.e., investors might not get paid back), conservative investors will err on the side of caution and pass on the opportunity.