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.
4 /PRNewswire/ -- The Connecticut Development Authority's expected $10 million State of Connecticut General Fund Obligation Bonds, 1994 Series A are rated 'AA-' and the $7.
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.
76 billion five-year highway capital spending program is funded 40% with special obligation bonds and 60% with general obligation bonds.
Addison Village (IL), $6,100,000 general obligation bonds, series 2007 (insured: MBIA Insurance Corp.
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.
30 /PRNewswire/ -- Certain maturities of the State of Georgia General Obligation Bonds are rated "AAA" by Fitch.
Addison Village (IL), $6,900,000 general obligation bonds, series 2006C (insured: MBIA Insurance Corp.
Some critics point out that state general obligation bonds require only a simple majority vote to pass.