The term bond anticipation note refers to a note used for permanent financing.

The term bond anticipation note refers to a note used for permanent financing.

• A. True
• B. False
• C. It is a long-term instrument
• D. It represents a grant

Answer: (B)

Bond anticipation notes are short-term financing instruments issued to bridge the gap until permanent funding is secured with a long‑term debt issue. They’re not meant for permanent financing; the whole point is to cover project costs temporarily and then be repaid once the anticipated bond sale occurs (often from the bond proceeds) or from other funds. Because of that, the statement that a bond anticipation note is used for permanent financing is not correct. They are not long-term instruments, and they do not represent grants.

Bond anticipation notes are short-term financing instruments issued to bridge the gap until permanent funding is secured with a long‑term debt issue. They’re not meant for permanent financing; the whole point is to cover project costs temporarily and then be repaid once the anticipated bond sale occurs (often from the bond proceeds) or from other funds. Because of that, the statement that a bond anticipation note is used for permanent financing is not correct. They are not long-term instruments, and they do not represent grants.