Definition of Bond Anticipation Note (BAN)

short-term debt instrument with a maturity under a year, issued by a municipality or local government, usually for capital improvement projects, that is paid off when long-term bonds are issued.

short-term debt instrument issued by a state or municipality that will be paid off with the proceeds of an upcoming bond issue. To the investor, BANs offer a safe, taxfree yield that may be higher than other tax-exempt debt instruments of the same maturity.