Auction Rate Bond - ARB

Auction rate bonds (ARBs) are debt securities that typically mature in 20 to 30 years, and have adjustable interest rates. Municipalities and other non-profit groups use these securities to finance long-term needs at a lower rate. These bonds are tax exempt and equate to cash in the books.

They sound great, but since 2008, these are traded less often and so, are harder to turn into actual cash. These bonds are sold using the Dutch auction style, where the price is only set (and accepted) after all bids are in.