general obligation bond

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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 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 ?
These GO bonds are about managing Denvers growth in a way that makes important repairs to our infrastructure, enhances our mobility and protects the quality of life we love about our city, Mayor Michael B.
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);
Prior to delivery of additional GO bonds, a school district must file its debt service payment schedule with the office of the state treasurer.
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;
The current action assigns Fitch's rating to existing parity GO bonds issued by the bond bank under the 2005 resolution, but not previously rated by Fitch.
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.
The 'AA+' rating on Texas GO bonds reflects the state's low debt and conservative financial operations and an economy that has expanded and diversified.