full-faith-and-credit pledge


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Full Faith and Credit

A situation in which a government agrees to repay a debt no matter what. For example, if a bond is backed by the full faith and credit of the United States, the U.S. government must find some way to repay the bond. U.S. Treasury securities, Ginnie Mae bonds, and some other debt securities are call full-faith-and-credit bonds because they have this backing. Municipalities may also attach full faith and credit to their bonds, but this means less than the credit of the United States.

full-faith-and-credit pledge

In a municipal obligation, a pledge of the full financial resources and taxing power of the issuer. A full-faith-and-credit pledge is an important element of general obligation bonds. See also special assessment bond.