How to Find a Paying Agent for Municipal Bonds

Research Your Municipal Bond Investments Carefully

The paying agent is the party responsible for the disbursement of funds raised through a bond issue. The paying agent is responsible for all coupon and maturity payments as well as any sinking fund or pre-refunding (early retirement) of the bond issue. Finding the paying agent is a relatively simple matter depending on how much information you have about the bond. Finding a paying agent with a Committee on Uniform Securities Identification Procedures (CUSIP) number is particularly easy.

Instructions

1. Contact the broker or look on the trade's confirmation ticket. Locate the CUSIP number, a unique number (like a bar code) associated with every trade. Use a popular search engine, enter the CUSIP number and the details of the bond issue should be revealed. If not, go to the Fidelity Security Locator (see Resources below) and enter the CUSIP. Bond details, including the paying agent, should appear.

2. Locate the purpose or title of the bond, the coupon rate and the maturity, or the state, and date of the bond issuance. Use this information and contact your broker. This partial information should be enough to locate the issue through his compliance department.

3. Contact the issuer directly, if known. Bond issuers always keep records of all bond issues in their legal or compliance office. Such records are usually on file in the State Treasurer's office as well.

4. Contact the fiscal agent (the agent who distributes the coupon and maturity payments), if known. This bank is probably the paying agent. If not, its records will show who the paying agent is. It is the bank that provides the fiscal agent with funds to disburse.

5. Find the underwriters, the municipal counsel, the fiscal adviser and the broker who sold the bonds in question. With a close approximation of the title, the municipality and the state of issuance, each of these parties can be found through searches at any brokerage office or any registered municipal bond dealer. Tell the broker you have an incomplete description of the bond. His computer facilities can inspect outstanding bond issues and locate the paying agent and any other parties to the issue you may need.

Tips & Warnings

• The paying agent must make payment to all bond holders for their coupon and interest. He will have a CUSIP number for every bond transaction.

References

• Investors Guide to Municipal Bonds
• Definition of Municipal Bond Parties
• Municipal Bond Reference Group

Resources

• Fidelity Security Locator