general obligation bond

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Related to general obligation bond: Limited Tax General Obligation Bonds

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 bond (GO)

A municipal debt obligation on which interest and principal are guaranteed by the full financial resources and taxing power of the issuer. This broad promise makes a general obligation bond of higher quality than issues secured by a particular project or a more limited guarantee. It also results in lower returns to bondholders. Also called full-faith-and-credit bond. See also revenue bond.
References in periodicals archive ?
CFD revenue also may be used to pay for the maintenance of school facilities, while general obligation bonds may only be used to repay the annual debt service on the bonds.
General obligation bonds series 2005DF (refunded with new CUSIPs assigned);
This proposition allows the state to sell $350 million in general obligation bonds for local library facilities.
New York City (NY) general obligation bonds (tax-exempt) series fiscal 2005B (refunded with new CUSIPs assigned);
The two-thirds vote for local general obligation bonds is a vital taxpayer protection which has served the interest of both the public and the schools.
Credits taken off RWN in fourth quarter include State of New Jersey cigarette tax revenue bonds (affirmed following favorable legislative and administrative actions); Susquehanna Area Regional Airport Authority revenue bonds (senior bonds downgraded following the management's decision to circumvent the flow of funds under the master indenture; both senior and subordinate lien interest payments were made from draws on the debt service reserve fund, thereby calling into question the additional protection accorded to senior lien bondholders); and Detroit School District general obligation bonds (removed from RWN in conjunction with the underlying rating downgrade).
There is another reason why interest rates on general obligation bonds are relatively low.
Bolingbrook Park District (IL), $3,790,000 general obligation bonds, series 2006 (insured: CIFG Assurance North America, Inc.
Buckingham (PA), $3,600,000 general obligation bonds, series 2006B (insured: MBIA Insurance Corp.
El Camino Hospital District (CA), $144,975,000 general obligation bonds, series 2006 (insured: MBIA Insurance Corp.
The study found that use of general obligation bonds was overall trending downward although there were exceptions, such as California and Illinois, reflecting large, one-time issues for deficit funding and pension obligations, respectively.
Pomona Unified School District (CA), $13,000,000 (2002 Election) general obligation bonds, series 2006E (insured: CIFG Assurance North America, Inc.

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