General obligation

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General Obligation Bond

In the United States, a municipal bond in which the issuing locality pledges to use all revenues at its disposal to pay bondholders, including the raising of property taxes. Should a sufficient number of residents not pay their property taxes that it impacts revenue for bondholders, the terms of the bond legally require the municipality to raise property taxes to make up the shortfall. There are two basic types of general obligation bonds. A limited GO allows for the raising of property taxes up to a certain percentage, while an unlimited GO theoretically allows the municipality to levy taxes of up to 100% of a property's value. Because an unlimited GO provides a great incentive to pay property tax on time, and because many states only allow such a bond to be issued following a vote on the matter, credit ratings agencies usually rate them higher. However, both types of GO are generally rated highly.

General obligation (GO) bond.

State and local governments issue general obligation (GO) municipal bonds and pay the interest and repay the principal from general revenues.

GO bonds are considered somewhat less risky th, and so pay slightly lower rates,an the same municipality's revenue bonds, which are backed by income from a specific project or agency.

A municipality's general revenues come from the taxes it is able to raise and money it can borrow. Those powers are sometimes described as its full faith and credit.

References in periodicals archive ?
The Atkins GO Bond program management team will be responsible for helping the city evaluate the timing of project construction; coordinating with appropriate city agencies, cultural partners and the Denver Health and Hospital Authority; communicating the progress of projects with city departments and the community; and coordinating bond issuances.
The program's 'AA+' rating reflects strong statutory provisions and program mechanics, as well as the state's general credit condition expressed in its 'AAA' GO bond rating.
For further information on the bond bank's GO bond program, please see Fitch's release dated Feb.
The average tax rate levied to repay the two election of 1999 GO bond issuances, including this issue, is expected to be $14 per $100,000 of assessed valuation, assuming a conservative 6% future annual assessed valuation growth rate.
New York City (NY) GO bonds ser fiscal 1997 E & F (refunded with new CUSIPs assigned);
Bridgeport (CT) GO bonds series 2001C (refunded with new CUSIPs assigned);
For further information on GO bonds and ERBs, please see Fitch's website at 'www.
New York City (NY) GO bonds series fiscal 2002A subordinate series A-1;
11, 2009, consisted entirely of taxable GO bonds, series 2009B (Build America Bonds - Direct Payment to Issuer), rather than GO bonds, (Build America Bonds) taxable series 2009B-1; no series 2009B-2 bonds were sold.
Westmont Hilltop School District (PA), $5,025,000 GO bonds series 2009;
21, 2004 with proceeds of the city's GO bonds, fiscal 2005 series H and I and an equity contribution of $336,689.
These bonds were refunded on April 28, 2005 with proceeds of the city's GO bonds, fiscal 2005 series N and an equity contribution of $475,000.