Moral obligation bond

Moral obligation bond

A tax-exempt bond issued by a municipality or a state financial intermediary that is backed by the moral, but not legal, obligation of a state government to appropriate funds in case of default .

Moral Obligation Debt

A municipal bond or another government bond that is not secured by the full faith and credit of the issuer. Unlike general obligation bonds, which are secured in this way, moral obligation bonds carry higher risk and, therefore, a higher yield. However, because they are still government bonds, their interest is usually deductible from federal income taxes.
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The EDC is also under fire from 38 Studios bondholders for selling moral obligation bonds to the video-game company.
will use moral obligation bonds to build a new, 100,000-sq.
Total debt includes moral obligation bonds of entities to which the city lends some support and equals a moderate $3,699 per capita and 4.