Legal Opinion is an opinion issued by a bond attorney stating that the issue is a legally binding obligation of the state or municipality. The legal opinion also contains a statement regarding the tax status of the interest payments received by investors.
Applying "Legal Opinion" to Securities Exams:
When a municipality sells bonds to investors it may obtain a legal opinion to help market the bonds. The issuer will hire a lawyer who specialized in municipal bonds to review the bond and offer their legal opinion regarding the tax statues of the bond’s interest payments and the authority of the municipality to issue the bonds.