moral obligation debt

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Moral Obligation Debt

A municipal bond or another government bond that is not secured by the full faith and credit of the issuer. Unlike general obligation bonds, which are secured in this way, moral obligation bonds carry higher risk and, therefore, a higher yield. However, because they are still government bonds, their interest is usually deductible from federal income taxes.

moral obligation debt

Government or municipal debt that carries an implied pledge of support but that is not explicitly guaranteed by the full faith and credit of the guarantor organization. Moral obligation debt is generally issued in order to circumvent legal restrictions on borrowing. The securities are rated lower and carry higher yields than general obligation bonds of the same issuer.
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Fitch rates several other moral obligation bonds whose ratings are not expected to change, so are not on Rating Watch.
The EDC is also under fire from 38 Studios bondholders for selling moral obligation bonds to the video-game company.
Then Moody's also gave a Aaa rating to the entity's Infrastructure Revenue Bonds (Virginia Pooled Financing Program) Series 2010A (Tax- Exempt) and a Aa2 rating to its State Moral Obligation Bonds (Virginia Pooled Financing Program) Series 2010A (Tax-Exempt).
In addition, the Senate has approved a new concept of financing known as "moral obligation bonds," which give community hospitals better access to capital markets, the senator said.
will use moral obligation bonds to build a new, 100,000-sq.-ft.