Issuing municipal bonds can improve ULB finances and improve city infrastructure by involving various stakeholders.
Before issuing municipal bonds, ULBs should have a decent credit rating, strengthen their finances, follow necessary disclosure norms, select infrastructure projects to be financed with bonds backing and getting approvals from required authority like SEBI.
The process of issuing municipal bonds should include preparation of offer documents for the investors, comply with SEBI’s Issue and Listing of Municipal Debt Securities Regulations, 2015 and list on stock exchanges, issue the bond for a standard timeline like 5-10 years and then market the bond to increase visibility.
After issuing the bond establish a Debt Service Reserve Account (DSRA) for repayment assurance.
