Bond Anticipation Note is short term municipal financing sold in anticipation of long-term financing.
Applying "Bond Anticipation Note" to Securities Exams:
Bond anticipation notes are most often used to even out a municipality’s cash flow. If a municipality is in the process of issuing a municipal bond, but needs cash immediately, it can issue a BAN. The BAN has a maximum maturity of one year. Once the municipal bond is issued the proceeds will be used to pay off the note. Additionally, bond anticipation notes are considered money market securities and they are rated by Moody’s Investment Grade (MIG).