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 ?
Periodically, the City and County of Denver authorizes GO bonds to restore, replace, and expand infrastructure and capital assets across the city--assets that are uniquely Denver and are points of pride for residents.
--$75 million GO bonds (Utah School Bond Guaranty Program), series 2018B.
The interest rate will probably be a little higher than the GO bonds sold Tuesday.
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.
The March 11 offering, in which the commonwealth sold $3.5 billion in GO bonds with a 2035 maturity, is consistent with that assumption, and demonstrates the ability of the commonwealth to access the market.
The city's filing further stated that if the bankruptcy judge finds that the city's unlimited-tax GO bonds are secured debt, property tax revenue earmarked for those bonds would be largely off limits for the DIP financing.
The city will use the bond proceeds to refinance its outstanding series 2001 unlimited-tax GO bonds for the sole purpose of interest savings.
The GO bonds are typically issued to finance infrastructure and services that either do not generate any revenue, or generate very little revenue compared to the expenditure involved.
GO bonds are backed by general taxation and often are subject to constitutional limits.
Securities and Exchange Commission, assigned a 'AA+' rating to the following State of Wisconsin General Obligation (GO) bonds: --$260.565 million GO Bonds of 2018, series B.
obligation (GO) airport bonds, series 2011B GO airport bonds and series 804 GO bonds.
Although there always will be outliers, expected rating ranges for county GO bonds and water and sewer system revenue bonds should be between A minus and AAA.