Essential Purpose Bond

Essential Purpose Bond

A municipal bond that intends to fund the normal functions of a local government. Examples of institutions and activities that an essential purpose bond finances are municipal buildings, police cars, firefighter salaries, and so forth. Essential purpose bonds differ from private activity bonds, which are municipal bonds intended to help private business in the community. It is also called a traditional government purpose bond. See also: General obligation bond.
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Essential Purpose Bonds. Traditional governmental utility revenue bonds are very sound securities that are payable from pledged revenues of established governmental water, wastewater, and similar utility monopolies.

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