Obligation bond

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Obligation bond

A municipal bond with a face value greater than the value of the underlying property. The difference is designed to compensate the lender for costs exceeding the mortgage value.

Obligation Bond

In the United States, a municipal bond in which the face value is greater than the value of the property or project securing it. An obligation bond requires the issuing municipality to pledge its revenue to finish paying the bond. These bonds are intentionally designed this way and are used to compensate bondholders for any costs they incur that exceed the value of the project or purchase the bond is intended to finance.
References in periodicals archive ?
Today, general obligation bonds are used indiscriminately.
The MOA stated that Irwindale proposed to finance the stadium by issuing general obligation bonds.
Bridgeport (CT) general obligation bonds series 2003A (all maturities);
The city has retained Fitch, which has offices in New York City and London, for the last three years to evaluate its general obligation and judgment obligation bonds - now about $840 million, or one-third of the city's taxpayer-supported bond debt.
Outside of healthcare, other notable upgrades include Los Angeles County Metropolitan Transportation Authority sales tax bonds ('A' and 'A+' rated tiers upgraded to 'AA-'), Massachusetts Port Authority general revenue bonds (upgraded to 'AA' from 'AA-'), and the State of Tennessee general obligation bonds (upgraded to 'AA+' from 'AA').
1 billion of general obligation bonds to spend on acquisition, development and protection of recreational, cultural and natural areas, to protect wildlife habitats and to repair and improve the safety of state and neighborhood parks.
Some critics point out that state general obligation bonds require only a simple majority vote to pass.
Addison Village (IL), $6,100,000 general obligation bonds, series 2007 (insured: MBIA Insurance Corp.
at district headquarters, 21515 Redview Drive, Superintendent Bob Lee will outline the ramifications of both types of fund-raising methods: the issuance of general obligation bonds or the establishment of a community facilities district.
Addison Village (IL), $6,900,000 general obligation bonds, series 2006C (insured: MBIA Insurance Corp.
In contrast, general obligation bonds such as Proposition BB are backed by even more ironclad security - the value of all the private property within the taxing agencies' jurisdictions.
Bass Lake Joint Union Elementary School District (CA), $10,000 general obligation bonds, series 2006 (insured: Financial Guaranty Insurance Company)