The current urban-financing crisis could finally make “community microbonds” a serious alternative to traditional municipal bonds. For several decades, municipal issuers have used minibonds—sold in increments significantly less than $5,000—to access a broader group of potential investors and avoid the fees associated with a standard bond issuance. Microbonds refer to bond denominations of $100 or less, but there is no common industry standard for the term. In fact, some issuers elect to use the term minibond to refer to bonds denominated in increments as low as $25.
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