A municipal bond is a government bond which is issued by a municipality rather than a national treasury. Money borrowed by municipalities through municipal bonds is used to fund public projects.
In Switzerland, bonds may be issued by cantonal governments and municipal governments in addition to the federal government. The term government bond is most widely used to denote bonds issued by the federal government. These federal bonds are colloquially known as “Eidgenossen.” Cantonal bonds are issued by a number of cantonal governments, and may be classified as municipal bonds for foreign investors. These include the bonds issued by the cantonal treasuries of Bern, Geneva, Basel-Stadt. Municipal bonds, in the strict sense of the term, are not widely issued in Switzerland, although a number of Swiss municipalities, including the City of Zurich, issue their own municipal bonds.