Municipal Note is a short-term municipal issue sold to manage the issuer’s cash flow, usually in anticipation of the offering of long-term financing.
Applying "Municipal Note" to Securities Exams:
Municipal notes are high quality, short term debt issued by municipalities. Muni notes are always issued in anticipation of "something". Some examples of notes include BANs (bond anticipation notes), TANs (tax anticipation notes), RANs (revenue anticipation notes), TRANs (tax and revenue anticipation notes), CLNs (construction loan notes). Ex: If a municipality is in the process of issuing a municipal bond and finds that it needs cash immediately it can issue a BAN and receive the needed money quickly. When the bond is issued the proceeds will be used to pay off the note amount. The maximum duration for any muni note is one year.