Municipal issuers traditionally pick the bid with the lowest True Interest Cost in a competitive deal. In the case of a single bond, TIC is analogous to YTM based on the proceeds received by the issuer.
But when it comes to callable bonds, as most munis are, TIC has a serious deficiency. Issuers pay up in yield, but TIC fails to account for the refunding option, and therefore gives a misleading picture.
