General obligation

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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 (GO) bond.

State and local governments issue general obligation (GO) municipal bonds and pay the interest and repay the principal from general revenues.

GO bonds are considered somewhat less risky th, and so pay slightly lower rates,an the same municipality's revenue bonds, which are backed by income from a specific project or agency.

A municipality's general revenues come from the taxes it is able to raise and money it can borrow. Those powers are sometimes described as its full faith and credit.

References in periodicals archive ?
Nevada's 'AA+' Issuer Default (IDR) and general obligation (GO) ratings reflect the state's conservative liability position, strong revenue and expenditure frameworks and historically responsive financial practices, as well as its success in managing rapid population growth and development.
And again, the savings to be obtained by financing the acquisition with general obligation bonds is in the $2 million range.
The LTGO bonds are general obligations of the district payable from ad valorem taxes levied on all taxable property within the boundaries of the district, without limitation as to rate but limited as to amount by provisions of the statewide Limitation Law.
Market observers--including regulators--sometimes overgeneralize, incorrectly, by describing municipal securities merely as general obligation bonds and revenue bonds.
Measure 29 would give the state treasurer the constitutional authority he needs to issue general obligation bonds to refinance the state's unfunded obligation to the Public Employees Retirement System.
ENPNewswire-July 31, 2019--KBRA Releases Report Assigning AAA Rating and Stable Outlook to State of Delaware General Obligation Refunding Bonds, Series 2019A
New York: Fitch Ratings has affirmed Alaska Housing Finance Corporation's (AHFC or the corporation) general obligation (GO) rating at 'AA+'.
30 March 2010 - S&P on Monday raised to A from A- its underlying rating (SPUR) on Port of Pasco, Washington's outstanding general obligation (GO) bonds citing its strong financial results and solid and diverse revenues.
General obligation debt increased by $11.2 billion, or 146 percent, in 2003, the report said.
The measure asks whether general obligation bonds or revenue bonds should be used for the state's share of a public/private $500 million expansion of the research capability of Oregon Health and Science University (OHSU).
ENPNewswire-July 30, 2019--KBRA Assigns AAA Rating and Stable Outlook to State of Delaware General Obligation Refunding Bonds, Series 2019A

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