limited-tax general obligation bond

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Limited-tax general obligation bond

A general obligation bond of a government backed by specified or constrained revenue sources.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Limited-Tax General Obligation Bond

A municipal bond with two distinguishing features. First, as a general obligation bond, it is secured by all revenues the issuing municipality generates that are not otherwise secured. That is, unless a municipality's revenue specifically secures another bond, the municipality must theoretically use all of its other revenue to pay the bond. Secondly, because it is a limited-tax bond, its provisions place a maximum possible tax increase that the municipality can levy if its other revenues come up short. The first provision reduces the bond's risk, while the second provision increases it.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

limited-tax general obligation bond

A municipal bond that is secured by some limited taxing power of the issuer. For example, a bond may be secured by a municipality's property tax subject to a maximum rate at which the tax may be levied. Although a limited-tax general obligation bond is considered a general obligation of the issuer, because of the limited taxing power, this bond is somewhat more risky than a general obligation bond secured by full taxing power.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
--$303.2 million limited tax general obligation bonds (LTGO);
The rater also gave its A long-term rating to the port's series 2010 limited tax general obligation bonds.
Intended to streamline and modernize municipal finance, the Revised Municipal Finance Act (Act 34) authorizes the use of several new types of securities, including bond anticipation notes (BANs), grant anticipation notes (GANs), and limited tax general obligation bonds. In addition, municipalities that file their audits to the Department of Treasury within six months of the end of their fiscal year will be exempted from the requirement to obtain state approval of securities until the next audit is due.
Securities and Exchange Commission, assigned the following rating to Royal Oak, Michigan: --$31 million limited tax general obligation bonds (LTGOs), series 2018 'AA'.
--$575,000 limited tax general obligation bonds (LTGO) series 2004;
Concurrently, Moody's has affirmed the Aa3 rating on the city's unlimited tax general obligation bonds outstanding in the amount of $18.1 million, and the A1 rating on the city's limited tax general obligation bonds outstanding in the amount of $227.6 million.
Moody's Investors Service has assigned an Aa2 rating to the City of Lebanon, OH's $2 million Municipal Services Facility Limited Tax General Obligation Bonds, Series 2016.
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