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.
Related or Semi-related Video
Finance: What is Counterparty Risk?9 Views
Finance a la shmoop what is counterparty risk?
alright here's you the party and here's the guy you're contracting with to sell [Woman and man stood side by side]
18 tons of bricks or buy a line of credit for your flower shop or sell a
futures contract with the right to buy oil at 80 bucks a barrel for the next [Person signs contract]
two years so you're the party and he's the counterparty and the yin and yang of
the party and here's the risk yeah well the counterparty risk is just
that the person you contracted with doesn't live up to their end of the
bargain you pay them good money you sign a good contract all lawyered up and [Stack of money and contract appears]
stuff and then they split like totally split disappeared sea men choose the
bottom of the ocean maybe they went to Bora Bora
maybe they got facial surgery in the Philippines you know they do that now [George Clooney in a surgical bed]
well when that happens you will probably feel like crying and you should its your
counterparty you can cry if you want to come on that was a good reference people [Man singing]
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